ABERDEEN, UK – Britain’s Chancellor Phillip Hammond has maintained the government’s commitment to present fiscal conditions for the offshore oil and gas industry in his latest budget.
The current headline tax rate will continue. In addition, the government will launch a call for evidence on its plans to re-position Scotland as a global hub for decommissioning.
Industry association Oil & Gas UK recently revealed that so far this year, oil companies have announced 11 new UK offshore development projects – more than the total for the last three years combined – with more expected in the coming months.
Chief Executive Deirdre Michie said: “The Chancellor’s commitment to fiscal stability is welcome recognition of the hard work by industry to encourage recovery following one of the most testing downturns in its history.
“With reduced costs, competitive fiscal terms and improved operational performance, theUK continental shelf is becoming an attractive investment proposition. These conditions are delivering a tentative recovery, with more projects approved so far this year than in the last three years combined.
“It’s important that this stability is sustained for the longer term, encouraging further investment and much needed new business for the supply chain, which continues to be under pressure.”
The association also forecasts steady growth inNorth Sea decommissioning market, averaging around £1.8 billion ($2.29 billion)/yr over the next decade.