Oil & Gas UK has welcomed the UK Government’s measures to push the oil and gas industry, including the introduction of legislation to enable the government to give the industry certainty on tax relief on decommissioning costs.
Oil & Gas UK chief executive Malcolm Webb said the measure should delay decommissioning of oil and gas infrastructure, give rise over time to up to £40bn of extra investment and result in the recovery of an additional 1.7 billion barrels of oil and gas.
The package of tax measures are expected to lead to additional investment to develop the UK’s economically important oil and gas reserves, all at no net cost to the Exchequer.
Webb said, "The Exchequer could receive an extra billion pounds of tax revenues in the first five years alone."
The government has extended the field allowance regime to deep fields west of Shetland and to a wider range of small fields, and also promised an allowance for new investment in existing fields and infrastructure.
Upon implementation of these measures, additional investment of over £10bn and the production of hundreds of millions of barrels of the UK’s oil and gas are expected, stimulating exploration for further oil and gas reserves.