Buoyed by Chancellor Philip Hammond’s Budget announcement concerning North Sea tax reform, Jamie Stark, partner at Burness Paul, released a call to arms to operators within the north-east.
For months, industry leaders and politicians have been calling for the reform to make it easier to sell mature oil and gas fields.
Yesterday, Chancellor Philip Hammond said transferable tax history would be introduced for the oil and gas sector in November 2017.
Mr Stark said: “Some positive news for the North Sea from Budget today. As has been reported, the Chancellor has announced that he will allow the tax history of an oil and gas field to be transferred when it is sold. A lot of the detail is still to be worked out and the changes are not scheduled to come into play until November 2018.
“If the effect of these steps is to help lessen the deterrent of decommissioning liabilities for new investors into the North Sea, then that will certainly be welcomed by the industry.
“We have seen growing evidence that the North Sea is back on the radar for new entrants, for new owners who can make a real go of extending the life of assets and, in turn, help the fortunes of an industry which, well, still needs help.
“From the large scale acquisition of Shell assets by Chrysaor to the newly announced purchase of BP assets by Serica Energy, there are new name plates popping up across town and, you have to hope, some positive signals at last for the North East.
“This may feel like yet another sound bite laden commentary talking up the oil & gas industry and the prospects for the North East. And, yes, it is. We need to start talking ourselves up again and to start celebrating every bit of good news to come our way.
“Renewed activity in the transfer of oil and gas assets brings new capital to the table, refreshes how businesses operate and helps the industry take best advantage of our North Sea resource.
“So we welcome any tax changes that encourage new activity. Just as we welcome the new entrants, the custodians of the future of the North Sea, if you will. And I make no apologies for saying that we look forward to it being a long one at that.”
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