Offshore staff

LONDON, UK -- Decommissioned UK fields undergoing re-development will not be liable for Petroleum Revenue Tax (PRT) from July 1, 2007. Britain's Chancellor Gordon Brown announced this concession during his recent Pre-Budget Report statement to the UK parliament.

Currently, all UK North Sea fields developed before 1993 are liable for PRT – when 50% corporation tax is added, this can push the fields' marginal tax rate to 75%.

Malcolm Webb, chief executive of the UK Offshore Operators Association, welcomed the new measure. It should encourage investors to consider re-opening abandoned fields, he said, in turn generating new production, and with it, increased tax revenues. But there was still an urgent need, he added, for further fiscal adjustments to encourage longer-term investments. "We are in dialogue with the Treasury on this very matter."

12-14-06