LONDON– Oil & Gas UK has welcomed a new tax relief measure, designed to stimulate UK gas field development.
Association chief executive Malcolm Webb said: “Oil & Gas UK is greatly encouraged by the support announced for new shallow-water gas fields in the UK, which have particularly high capital costs and are subject to 62% tax on production.
“We believe that the measure should trigger the development of specific gas projects involving expenditure of £2.4 billion [$3.7 billion].”
Webb added that in thisMarch’s budget, the UK Chancellor was given powers to introduce a brownfield allowance to promote investment in existing fields. The aim, Webb said, was to boost investment by a further £3.5 billion ($5.4 billion), and increase oil and gas recovery by more than 200 MMboe.
“While we are encouraged by the Chancellor’s confirmation that the government will continue to work with the industry on this, discussion with the Treasury has been ongoing for many months, and time is now of the essence. For some fields near the end of their planned life, an early decision on support for further investment is urgently required if the UK is to reap the full benefit in terms of jobs, tax revenues, and energy security.”