Supporting the oil and gas industry

The Chancellor’s announcement of a reduction in tax rates and effective abolition of Petroleum Revenue Tax is a welcome boost for our oil and gas industry, which has been facing exceptionally challenging times over the last 12 – 18 months.

Across the North Sea, this will reduce the rates from 67.5% for the older fields and 50% for the newer fields to 40% for all fields. This is aimed at stimulating investment at a time when the industry desperately needs it.

It is a smart move that recognises that the tax prize for the Treasury at this stage in the life of the North Sea is not corporate taxes. Instead the Government has more tax revenue to gain by doing all it can to protect investment and jobs and all the tax that goes with that.

The industry is also in line to get help to ensure that companies that incur decommissioning costs get relief for that expenditure. This will help future deals and will be broadly welcomed by operators.