Budget encourages “significant investment” in the North Sea

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Wednesday 21 March: Derek Leith, office managing partner and head of oil and gas taxation at EY in Aberdeen, says: “Today’s announcement promises to encourage significant investment in the North Sea and was badly needed after last year’s shock increase in the oil and gas tax rate.

“Confirmation that the Government intends to enter into contractual agreements on tax relief for decommissioning cost improves the fiscal stability of the UK Continental Shelf, while the targeted incentives for particular types of fields will go some way in increasing the attractiveness of areas currently starved of investment.

“The Budget demonstrates government acceptance that establishing a stable tax environment in the basin will prolong the life of existing infrastructure, deliver millions of more barrels of oil equivalent and boost the Treasury’s coffers via increased tax take.”