Government Support for Older UK Oil and Gas Fields Will Boost Investment, Production and Tax Revenues, says Oil & Gas UK

abarrelfull wrote on 08 Sep 2012 21:44
Tags: uk upstream

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The Government today announced that it would introduce a new Brown Field Allowance which will shield up to £250m of income in qualifying brown (older) field projects, or £500m for projects in fields paying Petroleum Revenue Tax, from the 32% Supplementary Charge rate.
Oil & Gas UK today welcomed the Chancellor’s announcement of the new tax relief to encourage investment in older oil and gas fields. Economics and commercial director, Mike Tholen, said: “This is a strong signal of the government’s commitment to make the most of the UK’s oil and gas resources to the benefit of our energy security, the public purse and jobs.
"Oil & Gas UK is encouraged by the support announced for oil and gas ‘brown-fields’ in the UK which typically have high running costs and are subject to up to 81 per cent tax on production. This initiative will have an immediate impact in that it will help to promote investment and sustain production from many mature fields, enabling more oil and gas to be recovered from them and postponing decommissioning by a number of years.

“The measure builds on recent constructive interventions by the Treasury and we believe in the near term it should rapidly lead to a number of new investments amounting to £2 billion, create many thousands of high skilled jobs, add tax revenues of over £1.5 billion and increase oil and gas recovery by 150 million barrels of oil equivalent, and have a further long term impact. We recognise this is an on-going dialogue and we will continue to engage constructively with the Treasury on appropriate means to promote investment.”

• Government Support for Older UK Oil and Gas Fields Will Boost Investment, Production and Tax Revenues, says Oil & Gas UK

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