Sights set on tackling barriers to new North Sea investment
08 March 2017
Derek Leith, EY Partner and head of oil and gas, comments on support for the sector from UK Government:
“Tax relief for decommissioning expenditure is a critical issue for the oil and gas industry, and HM Treasury’s announcement that a panel is to be set up to consider specific aspects of the relief mechanism will be welcomed.
“It is often said that the right assets need to be in the right hands to maximise economic recovery late in the life of the North Sea. Any hindrance to new investors being able to obtain effective tax relief for decommissioning costs may create a barrier to entry for those who want to invest in the future of the basin. Changes that remove such barriers can only be positive for the industry and the associated supply chain.
“While this announcement is a clear indication that HM Treasury understands the significance of this issue, much hard work lies ahead to prove the case for change and identify a satisfactory solution that does not increase the Exchequer’s exposure to decommissioning.”