UK Chancellor of the Exchequer George Osborne outlined details of a tax relief program for decommissioning offshore oil and gas platforms and also emphasized the government’s support for shale gas exploration.
Osborne’s comments came Sept. 3 at the Offshore Europe conference in Aberdeen. Regarding shale gas, Osborne acknowledged the UK public’s concerns about the safety of hydraulic fracturing, but he also said the oil and gas industry needs the ability to develop shale resources in order to remain competitive.
The tax relief for decommissioning is expected to attract billions of investment in UK North Sea oil and gas assets, Osborne said.
He believes the tax relief program will provide cost incentives for industry and will result in production that otherwise might have not happened. Under the incentive, UK officials expect small independents will be willing to acquire mature assets from the majors.
Previously, UK government officials worked with industry regarding decommissioning tax relief, and the Oil & Gas UK last year welcomed publication by the UK Treasury of agreements covering tax relief for decommissioning offshore platforms (OGJ Online, Dec. 12, 2012).
Decom North Sea, an organization specializing in UK decommissioning, has said increased certainty on the tax relief will lead to new jobs and investment in new technology.