Chancellor’s oil and gas measures are a welcome but small step in right direction
3 December 2014
Commenting on the Chancellor’s proposals for the UK oil & gas industry, Roman Webber, partner and head of tax for energy and resources at Deloitte, said:
“The measures announced today offer some encouragement for the oil and gas industry and are to be welcomed. However, many will question whether enough immediate action is being taken to support an industry that is struggling with poor project economics, in a mature basin with an unpredictable and complex tax system. The announced changes are estimated to give the industry a tax boost of about £90m a year over the next five years, but given that the upstream direct tax revenues are expected to be £2.8bn in the year to 31 March 2015 alone, this is only a small step in the right direction.
“Much depends on the additional changes being announced tomorrow. With a number of UK North Sea fields up for sale the risk remains that the current low exploration activity will continue, with companies choosing to invest in countries where financial returns may be more robust and the upstream tax system is more predictable. We will need to see the detail of the proposals tomorrow to understand if today’s measures and the future proposals are enough to safeguard North Sea jobs and future tax flows to the Exchequer.”
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Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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