Deloitte comments on implications for oil and gas of the Chancellor’s Pre-Budget ReportNews // December 10, 2009
Deloitte in the UK has issued the following statement following the UK Chancellor's Pre-Budget Statement on December 9th.
Andrew Ogram, tax partner at Deloitte in Aberdeen, said: “The UK’s oil and gas industry is likely to give a muted welcome to the extension of incentives for certain technically challenging fields announced in the Chancellor’s Pre-Budget Report."
“The Treasury estimates that these changes could unlock a further 300 million barrels of oil. The Government has also confirmed that it will continue discussions with the oil and gas industry on ways it can support developments west of Shetland, an area which could yield up to one fifth of the UK’s remaining reserves."
“However, with North Sea exploration in decline, the industry was hoping for bold new measures to kick start drilling."
“Industry calls for upfront credit for exploration drilling, as available in Norway, to encourage continued exploration and appraisal activity were ignored. A credit would have been particularly beneficial to smaller new entrants, who could be critical to maximising the recovery of North Sea reserves."
“Calls for bolder steps, such as cuts in North Sea tax rates or incentives to encourage investment in existing fields, were also ignored.”