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autumn statement

Markets

‘Speed up tax plans to spur exploration’

Offshore industry chiefs have urged the UK Government to speed up measures to support the sector after coalition ministers unveiled radical plans to reward North Sea investment. Tax regime changes aimed at making sure as much oil and gas as possible is extracted have been welcomed by operators. But they want them implemented sooner rather than later because of the challenges posed by low crude prices and high exploration costs. Highland MP and Chief Secretary to the Treasury Danny Alexander, and Exchequer Secretary to the Treasury Priti Patel, were both in Aberdeen yesterday to present their department’s financial review of the sector.

Opinion

Opinion: Revamping the UK oil taxation regime

In the Autumn Statement, the UK Government announced a number of measures aimed at increasing the competitiveness of the UK Continental Shelf. This included a 2% reduction in the Supplementary Charge to Corporation Tax, new tax allowances to encourage development of complex fields as well as enhanced tax measures for the exploration phase. But this was the curtain raiser to the main event in Aberdeen, where the Chief Secretary to the Treasury, Danny Alexander MP, presented a more detailed roadmap for the future fiscal approach to the UK oil and gas tax regime.

Opinion

Opinion: Reforms only go a short way

The reforms to the oil and gas tax regime announced by the Chancellor and Danny Alexander this week are, of course, welcome. Particularly in light of the Chancellor’s admission that it has been 21 years since the oil and gas industry last received a tax reduction. However, this announcement only goes a short way towards reversing the unexpected and damaging 12% increase in Supplementary Charge tax introduced by Danny Alexander at the 2011 Budget.

Opinion

Opinion: Another false dawn or a kick start for collaboration

The Treasury’s plan to reform the oil and gas fiscal regime is an interesting and encouraging document, which recognises the importance of the industry, while at the same time acknowledging the need to be more competitive in attracting and promoting capital investment in the UKCS. It has the hallmarks of collaboration, with the Treasury accepting that they must adjust their thinking as to tax receipts from the UKCS, and it is the first time in recent memory, committed to black and white, that ‘we are all in this together’. The Treasury does not publish a document of this importance without it having being very carefully vetted.

Opinion

Opinion: Danny Alexander’s North Sea lifebelt

It looks as if the UK Treasury has a fiscal plan that might work for the UK Continental Shelf and the industry appears broadly receptive. But there were multiple warnings issued to Treasury chief secretary Danny Alexander in Aberdeen that time is running out and that he must deliver concrete measures by the Government’s Spring Budget. Indeed, this urgency is made all the more acute by the revelations that Opec swing producer Saudi Arabia is now apparently content to let the oil price drop to around $60 a barrel and that it be a long, rough ride for everyone. The gathering of industry leaders and media at Oil & Gas UK’s offices to listen to Alexander and Tory colleague Priti Patel (exchequer secretary) was large.

Markets

Autumn Statement: Danny Alexander to reveal tax break plans

Offshore firms will be offered new tax breaks today to trigger a fresh wave of North Sea exploration, it can be revealed. Energy Voice has learned that Chief Treasury Secretary Danny Alexander will reveal plans to try to end the UK's exploration crisis through a system of tax credits for seismic surveys. The move is expected to be welcomed by industry leaders who have repeatedly called for extra incentives to stimulate flagging exploration rates.

Markets

Opinion: Will the 2014 Autumn Statement help re-energise the UK oil and gas industry?

Chancellor George Osborne took the floor yesterday for what is the last Autumn Statement before the next general election, and probably the current Government’s final opportunity to impact the economy. But given the fiscal position the Government finds itself in with the budget deficit remaining high and with tax revenues lower than expected, was the Chancellor able to deliver any December cheer for the oil & gas industry? Well, we definitely saw a number of positive items. The Government restated its support for both the onshore and offshore oil & gas industries, with a mixture of tax and other incentives such as the allocation of £31m to fund the creation of a world class sub-surface research test centre through the National Environmental Research Council.

Opinion

Opinion: Fuelling the future of North Sea oil and gas extraction

We welcome the financial incentives named in yesterday’s Autumn Statement, which demonstrate that the Government has not only recognised the increased volatility of the North Sea oil sector stemming from falling global prices and diminishing reserves, but is taking action. We are pleased to see that, in line with GE Oil & Gas, this Government regards investment, innovation, collaboration and investment in future talent as the keys to unlocking the North Sea’s remaining potential. Oil & Gas exploration and extraction in the North Sea has been faced with increased complexity resulting in cost escalations causing delays and even cancellation of some projects; the supplementary charge reduction and ring fence expenditure announcements should have significant impact on freeing some investment.

Markets

Opinion: Autumn Statement – it’s a case of wait and see

Oh well, the North Sea is being kept on tenterhooks for a few more hours, with Treasury first secretary Danny Alexander scheduled to deliver the supposed main news today tomorrow. All chancellor Osborne was prepared to do was trail a few crumbs without even mentioning the North Sea fiscal review, let alone whether it will be the cornerstone of the Alexander delivery, though it of course will be. Just three measures were mentioned in his Autumn Statement address: “I can tell the house today that we will go ahead with an immediate reduction in the rate of the supplementary charge from 32% to 30%, we will expand the ring-fenced expenditure supplement from six to 10 years and we’re introducing with immediate effect a new cluster area allowance.”

Oil & Gas

UK Oil producers press for tax cuts as crude prices collapse

The UK oil industry, after chafing at suggestions it’s subsidized by the state, wants Chancellor of the Exchequer George Osborne to help save it from the market’s crashing prices. Osborne’s Autumn statement tomorrow, setting out tax and spending policies, is a chance for the more than 500 companies represented by Britain’s oil lobby to press for what it says is a fairer deal. In a letter sent to the chancellor last month, Oil & Gas UK said the collapse in prices comes on top of a 26% jump in unit costs for the industry last year alone. “Expect news on how the government will look to shore up investment in the North Sea,” said Sanjeev Bahl, Numis Securities Ltd.’s director of oil and gas equity research.

Oil & Gas

EY backs calls for new North Sea tax incentives

Energy experts at professional services firm EY have urged the UK Government to usher in tax breaks to help extend the life of the North Sea oil and gas industry. Its message echoes earlier calls, including from industry body Oil and Gas UK, Aberdeen and Grampian Chamber of Commerce and Aberdeen University petroleum economist Alex Kemp, for Chancellor George Osborne to deliver concessions in his autumn statement next week. The mini-Budget may coincide with the publication of findings from the Treasury's review of the current North Sea tax regime.