Budget: EEEGR welcomes move to review tax regime for North Sea oil and gas
PUBLISHED: 18:09 19 March 2014 | UPDATED: 18:09 19 March 2014
The East of England Energy Group (EEEGR) yesterday welcomed a pledge by George Osborne to review the tax regime for the North Sea to “make sure it is fit for the purpose of extracting every drop of oil we can”.
In his Budget speech, the Chancellor also said he would “take forward” all the recommendations of the Wood Report on the the future of North Sea oil and gas.
Simon Gray, chief executive of EEEGR, said: “EEEGR has long argued that gas and oil should be treated differently as both have many of the same overheads but the market value of gas is half that of oil.
“The region’s legacy assets require considerable investment against a backdrop of falling reserves. A differentiation between oil and gas and special recognition by the Wood Review for the Southern North Sea is crucial if we are to maximise economic returns for gas production off our coast.”
Industry trade body Oil & Gas UK warmly also welcomed the Government’s support for the Wood Report recommendations and the review of the industry’s tax regime.
However, it said it was “perplexed” by a move to change the basis for the taxation of drilling rigs and accommodation vessels supplied using bareboat chartering arrangements to the UK’s offshore oil and gas industry, despite evidence that this could prove damaging to exploration and development activity.