Oil & Gas UK welcomes consultation on uHPHT allowance

Oil & Gas UK said it welcomes the opening of a formal consultation by HM Treasury on a new cluster area allowance to support investment in ultrahigh-pressure, ultrahigh-temperature (uHPHT) oil and gas fields on the UK Continental Shelf (UKCS).

Michael Tholen, OGUK economics director, emphasized that such technically demanding fields are difficult to develop, and “the current tax regime is seen by all to be a barrier to investment.

“The government will need to work closely with industry to develop a simple allowance which promotes investment in uHPHT, encourages exploration of the surrounding area to fully utilise the potential of any resulting new infrastructure; a complex solution could lead to the wrong outcome,” he said.

HM Treasury on July 14 announced a formal consultation into the future of the UK offshore oil and gas tax regime (OGJ Online, July 14, 2014).