High oil price and windfall tax ‘threaten’ decommissioning targets, report warns

New research has warned that high oil prices, coupled with the UK Government’s windfall tax, could “pose a threat” to North Sea decommissioning targets.

Boston Consulting Group (BCG) said high prices “incentivise reinvestment” and the new tax does not provide relief for decommissioning costs, so the “rational choice” is to continue to extract oil rather than leave it in the ground.