More than half of the value of North Sea oil and gas reserves is yet to be extracted – representing an asset with a potential wholesale value of a trillion pounds – Alex Salmond said, as he urged the UK Chancellor to deliver long-term stability in the tax regime to support maximum recovery by the industry.
The First Minister, in an address to an SCDI Oil & Gas conference, welcomed the fact the UK Government is now working with the industry on options for reform of the tax regime, following the Chancellor’s unexpected and damaging announcement in last year’s Budget of a hike in the supplementary charge paid by North Sea operators.
Ahead of the Chancellor’s Budget next month, the First Minister called for action to:
* Ensure the tax system maximises recovery rates, including the use of enhanced field allowances;
* Ensure the industry is consulted on future tax reforms; and
*Provide greater certainty on future decommissioning tax relief.
Mr Salmond also said a new strategy, developed with the oil and gas sector, would be published in the Spring – and outline how the Scottish Government and its agencies will continue to support the industry in priority areas such as maximising extraction rates, securing its future skills base and developing the supply chain in Scotland and further afield.
“The industry is a huge success story, and the key message from this year’s conference is that there is still much more to come” the First Minister said.
“I welcome the fact the UK Government is now working with the industry on options for reform. It is in everyone’s interests for the oil taxation system to be incentivising, stable and fair and I urge the Chancellor to ensure that next month’s Budget delivers long-term stability, certainty and confidence across the industry.”