Deloitte comments on Emergency Budget and its impact on the UK oil and gas industryNews // June 23, 2010
Commenting on this week's Emergency Budget in the UK, Andrew Ogram, Deloitte Oil & Gas tax partner in Aberdeen, said: "In March 2010, the Conservative Party published its energy policy paper, Rebuilding Security. In the paper, the party announced its intention, if elected, to reform the taxation and licensing of UK oil exploration and development in order to profitably produce oil, rather than relying on imports."
"There have been suggestions that the Treasury would seek a windfall amount of cash from oil and gas companies with operations in the UK Continental Shelf by asking them to ‘buy out’ their future Petroleum Revenue Tax liabilities. The aim of this proposal would be to help Government by providing cash now rather than over the next few years and to reinvigorate the North Sea gas fields developed before 1993 which would not be subject to the 50 per cent tax on field profits going forward."
“Today the coalition Government has not announced any new or radical North Sea taxation regime changes. This is perhaps to be expected, bearing in mind the short period that Government has had to introduce new measures."
"We welcome the Government’s recently announced proposals to widen access to the UK’s offshore production infrastructure and the news that the secondary legislation will be introduced as soon as possible to extend the scope of the Ultra High Pressure High Temperature field allowance. It is to be hoped that future taxation measures will also be adopted to prolong the life of the North Sea and to maximise the recovery of reserves."
"The past few years has seen the previous Government tinkering around the edges of the North Sea fiscal regime. If the intention is to prolong the life of the North Sea and maximise recovery of reserves we suggest that more radical reform will be necessary.”