UK industry reacts to Chancellor’s statement
Oil & Gas UK has responded to UK Chancellor Phillip Hammond’s Autumn Statement.
Chief executive Deirdre Michie said: “We are pleased to hear the Chancellor re-commit to HM Treasury’s Driving Investment plan today. This sends a strong signal to investors that the government recognizes that the UK oil and gas tax regime needs to be predictable and internationally competitive.
“Today’s Treasury forecasts show our industry will be contributing £10 billion [$12 billion] more in production taxes over the next five years than was previously expected. While this can be attributed in part to changes in commodity prices and exchange rates it also reflects the significant work of industry to make our operations more efficient and to increase production…
“We will continue to work with Treasury on the important issue ofdecommissioning tax relief, key to stimulating investment and activity for the supply chain which we hope to see resolved by the 2017 Budget.”
However, Michie cautioned that “the sector is still in urgent need of fresh investment and we need government to keep working with us to ensure a competitive business environment.”
Scott Lehman, vice president of Marketing at,Petrotechnics, was less complimentary: “The Chancellor reinforced that commitments made to the UK North Sea oil and gas sector in the March Budget still stand.
“While this is good it’s not enough. More measures are needed to support a sector that is severely resource-constrained. Operators are facing immense pressure to do more with less while maintaining safe, efficient operations.
“This prioritization of limited resources is creating a growing maintenance backlog forNorth Sea assets. The result of this could be lessened with additional measures to provide much needed breathing room for operators to address underlying inefficiencies.”