Press release

Oil and gas transformation and constrained growth spurs global tax changes to boost investment

Oil-producing countries are adjusting tax regimes to attract investment and develop assets, as companies look to adapt to a new paradigm characterized by industry transformation and single-digit growth in production.

Oil-producing countries are adjusting tax regimes to attract investment and develop assets, as companies look to adapt to a new paradigm characterized by industry transformation and single-digit growth in production. This is reflected by the EY Global oil and gas tax guide 2018, which summarizes the oil and gas corporate tax regimes in 86 countries.

Derek Leith, EY Global Oil & Gas Tax Leader, says:

“Tax structures and business models across the globe continue to develop and change, as investment in digital technology not only drives efficiency, but brings new opportunities for existing and new entrants into the market. This trend is further compounded by continued uncertainty around the future of energy, which is driving governments to adjust to broader energy tax structures that help companies to invest in wider portfolios of assets.”

Changes to tax structures detailed in the tax guide also reflect the impact of a more stable oil price and rising confidence across the industry. This environment has driven increased access to capital as investors look to make early gains in a refreshed oil and gas market. 

Leith says: “The commodity price recovery is stimulating greater activity across the oil and gas sector. But while more capital is available, new projects are often capital intensive and competition for investment is fierce among countries with hydrocarbon resources. Forward-thinking governments are re-addressing their fiscal regimes to retain and attract further investment, and advance their transformation journeys.”

The tax system in the US is among those countries listed in the guide to have undergone the most significant tax change. The US Government enacted the Tax Cuts and Jobs Act of 2017 (TCJA) in December last year, ushering in broad and sweeping changes to the federal income tax system. While certain key US federal oil and gas tax provisions were left unchanged, the guide indicates that the ripple effects of the TCJA could have a profound impact on the sector and investment in the US.

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Notes to Editors

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About the guide

The Global oil and gas tax guide 2018 summarizes the oil and gas corporate tax regimes in 86 countries and also provides a directory of EY oil and gas tax contacts. The content is based on information current to 1 January 2018, unless otherwise indicated in the text of the chapter.

Contact

Oil & Gas, Power & Utilities, Mining & Metals

Michael Curtis, EY Media Relations and Social Media Assistant Director - Energy Sector

+44 20 7980 0454