The changes made by Chancellor George Osborne in today’s budget will “significantly” help the UK oil and gas industry, according to a leading legal expert.
Richard Cockburn, an energy partner at Bond Dickinson, said the reduction in Supplementary Tax from 20% to 10% as well as the “abolishment” of the Petroleum Revenue Tax (PRT) will help support the industry further.
Industry body Oil & Gas UK has already welcomed the changes, while oil major Shell said the commitment from the Government would also be beneficial.
He said:”The tax reductions announced today by the Chancellor will help significantly to improve the economics of North Sea projects.
“The effective abolition of Petroleum Revenue Tax has long been called for by the industry and will be welcomed widely.
“The reduction of the supplementary charge may allow operators to take a second look at projects which, until now, were looking uneconomic. Oil and Gas UK has been predicting investment approvals of less than £1billion this year relative to a typical annual figure of £8 billion over the last five years so the Chancellor’s reform has come at an opportune time.”
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