Offshore staff
LONDON – Oil & Gas UK has given the thumbs-up to the UK Chancellor’s latest budget statement and gas strategy announcement.
Economics director Mike Tholen said: “The government’s confirmation of previously announced tax allowances forshallow-water gas fields and mature fields will boost investment, production, and resulting tax revenues. We are confident that the deed aimed at providing investors with certainty on decommissioning tax relief, details of which are due to be released in the draft Finance Bill next week, will provide a further boost to activity in the medium and longer term.
“The reduction in corporation tax from April 2014 and temporary increase in the Annual Investment Allowance for the cost of machinery and plant onshore reflects recognition of the thousands of companies in our high technology supply chain which fosters hundreds of thousands of high-skilled jobs across the country. Confirmation of an industrial strategy to aid growth in the export of oil and gas related expertise and technology, currently valued at £6 billion [$9.7 billion] a year, is also good news for the UK’s balance of trade.
“We also welcome the publication of the gas strategy as we have long believed that when balancing the competing demands of lower emissions, security of supply, cost to consumers and economic competitiveness, gas has a greater role to play, especially in electricity generation, in the UK’s future energy mix than policies had previously allowed for. Natural gas, whether on or offshore, is struggling to attract investment – a production tax rate of 62% to 81% offshore does nothing to help – so we keenly await details of the scope of the consultation on the fiscal regime in that area.”
12/06/2012
