July 24 2014 Latest news:
Thursday, December 13, 2012
PROPOSED tax breaks on removing ageing oil and gas plants from the North Sea have been welcomed by business leaders as a way of keeping long-term jobs in Norfolk and Suffolk.
The Treasury’s draft proposals aim to encourage further investment in the North Sea by reducing the costly practice of decommissioning wells once they have dried up.
And it is believed the proposed tax reliefs could help increase the life span of oil and gas fields in the southern North Sea, which would maintain local jobs and business for the region’s supply chain.
It is estimated the decommissioning industry will be worth £4.5billion over the next five years, with £600million-worth of business in the southern North Sea.
The plans come just weeks before the final version of the proposals is published by the Treasury in the spring.
Chris Starkie, programme director at the New Anglia Local Enterprise Partnership, said: “The government recognises that gas production in the southern North Sea remains important and a key part of our energy supply and will remain so for many years to come.
“It is important we see measures, which give incentives to companies to continue exploring and extracting gas prolonging the life of wells and securing long-term jobs for businesses in Norfolk and Suffolk.”
The Government announced in this year’s Budget a package of measures to provide tax support to the oil and gas industry in a bid to encourage investment.
This included the Decommissioning Relief Deed, a tax relief on scrapping old oil and gas wells, for which the Treasury published a draft proposal on Tuesday.
It follows an industry-wide consultation by the government to gain insight from businesses on how best to deliver the proposals.
Simon Gray, chief executive officer of the East of England Energy Group, said: “The proposals will increase the lifespan of the oil and gas fields and maintain jobs within the industry and business to the supply chain across the region for a much longer time than previously.”
Waveney MP Peter Aldous added: “The government are very concerned that we do not let the lights go off and we have a secure supply of energy. It makes sense to make the most of our own assets, as well as helping to provide jobs for the supply chain.”