A year ago the industry was reeling in shock at a surprise £10billion tax grab on oil and gas producers.
In addition to the tax hike it was also hit by a cap on decommissioning tax relief, adding fuel to the fire.
“What a difference a year makes,” said Derek Leith, office managing partner and head of oil and gas taxation at Ernst & Young in Aberdeen.
“The announcement today is very much what we had hoped for.”
Chancellor George Osborne, following a year of talks between the industry and Treasury, today announced measures to boost investment in the North Sea.
These include long-awaited plans to end uncertainty over decommissioning tax relief and a number of field allowance measures.
Today’s announcements were not easily won, however. But they have seen “unprecedented” collaboration in the industry, said Mr Leith.
“The industry, to my mind, has got together in an unprecedented fashion to speak with one voice on some of these issues,” he said.
“It is clear Justine Greening, the former secretary to the Treasury, and now Chloe Smith, who replaced her last year, have listened to the industry and been persuaded that granting these new field allowances will allow investment in fields that might have otherwise been decommissioned and creating more liquid environment so older assets can be passed on to smaller firms.
“When I travel and I speak to people overseas who have invested in the UK they still think it is unpredictable.
“Now I think these measures today will go some way to bringing reassurance that the government values the sector and has listened.
“From a supply chain perspective, oil field services, this is ultimately great news to them in the medium to longer term we would hope more sustainable activity in the UK to build a platform for them to build and internationalise from.”
James Edens, managing director of CNR International, agreed on the amount of collaboration there has been in the industry and said the measures would be positive.
The firm has said it could double its activity in the North Sea given the right fiscal framework.
He said: “These are good for our industry and also good for CNR International.
“They clearly demonstrate the positive value of the collaboration and alignment we have seen in the industry, and with Government, over the past several months.
“On the back of today’s progress, we look forward to continuing this constructive dialogue and working together to seek solutions that maximise the economic recovery of the basin’s potential.”
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