Thursday 22 January 2015

Oil & Gas UK reacts to Government’s Investment Allowance Consultation

Oil & Gas UK welcomes the Government’s announcement today (22 January) of a further consultation into a basin-wide Investment Allowance as  a positive signal to investors but urges its delivery to be ‘fast-tracked’ and to take effect from Budget 2015 if the UK Continental Shelf (UKCS) is to regain any attraction for investment in the current climate.  

Speaking in Edinburgh today, Oil & Gas UK chief executive Malcolm Webb said:

“We are encouraged to note that work on the Investment Allowance announced in the Autumn Statement is progressing.  However a reduction in the headline rate of tax is also essential to really improve the international competitiveness of the UKCS.”

“Given the maturity of this basin, I’m afraid there will be no second chances.”

Oil & Gas UK welcomes the comprehensive scope of this new Investment Allowance which must also be easily accessible for all investors and help promote investment in all types of activity which seek to maximise economic recovery and extend the productive life of the basin.  It also welcomes the effort that has been made to consider appropriate transition measures that preserve the value of existing allowances under this new regime.

The allowance recognises that investment in the UKCS delivers skilled jobs, energy security and ultimately provides production revenues back to the Exchequer. Oil & Gas UK will be seeking further clarification on a number of points, including the rate of the Investment Allowance which must be competitive.

Malcolm Webb concluded: “We now need a much lower, simpler and more stable tax regime that will allow the investor to shift their focus away from fiscal risk towards investment opportunities. We see today’s announcement as a first step.”

Ends

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. It’s growing membership, which comprises oil and gas producers and contractor companies, numbers more than 500.

For press enquiries, please contact Sally Hatch at shatch@oilandgasuk.co.uk or 0207 802 2404 or Helen Jackson at hjackson@oilandgasuk.co.uk or 0207 802 2405.