Offshore accommodation provider Prosafe highlighted fears about potential tax changes in the UK North Sea in annual results yesterday.
The Norwegian company also joined other suppliers to the offshore oil and gas industry in warning of tougher times ahead as it reported forecast-busting fourth-quarter figures.
Oslo-listed Prosafe said pre-tax profits rose to £36.6million, from £24.7million a year earlier, ahead of analysts’ prediction of £28.8million.
Net profits for 2013 were £121.4million, up from £108.3million previously, as operating revenue rose more than 2.5% to £319.4million.
Cautioning over potential changes to UK taxation, Prosafe said: “In its autumn statement 2013, HM Revenue and Customs … proposed changes to the taxation of offshore contractors.
“Depending on the final outcome, this may increase the tax cost in respect of contracts for operations in the UK.”
The government wants to cap the amount independent offshore contractors can deduct against their corporation tax liability from the leasing of oil and gas capital equipment – primarily drilling rigs – from April.
Prosafe, which recently struck a £60million deal to provide accommodation for BP in the North Sea, said its order backlog and contract options at the end of 2013 were worth £1.04billion, the highest level in its history. It added: “The accommodation market remains busy, with a large amount of inquiries from clients both in the North Sea and the rest of the world.
“There are, however, fewer tenders taking place than at the same point in time last year, and it is likely that the contract inflow in 2014 will be lower than the record level experienced in 2013.”
Prosafe said underlying long-term demand drivers remained positive, adding: “Oilfields are constantly growing older at the same time as the prospects for increased oil recovery is improving. This, in turn, bodes well for demand for services related to maintenance, modifications and upgrades.
“Furthermore, there are several large hookup and commissioning projects in the pipeline, particularly in Norway, although the pace of new developments in the period from 2017-19 could be lower than in the period from 2014-16.”
Prosafe’s recent deal with BP will see the Norwegian firm’s Safe Caledonia accommodation facility being used to help extend the life of the Eastern Trough Area Project for 13 months from 2015.
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