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Tax break jumpstarts oil and gas investment in UK

This short film highlights the significant contribution of the UK oil and gas industry to British jobs, skills, technology and energy security.

If you question the connection between investment and taxes, look no farther than the North Sea.

Following the introduction of tax changes to encourage growth in the United Kingdom (UK) oil and gas sector, the industry has responded with the highest investment in more than 30 years. As a result, thousands of jobs are now being created across Britain and the “production of UK oil and gas and resulting tax revenues can now confidently be expected to rise over the coming years,” according to Oil & Gas UK, which published its 2013 Activity Survey last week.

The Activity Survey shows a diverse mix of investment, ranging from projects of less than £50 million ($75,485,000.00 US) to some of more than a billion pounds. Total investment soared to £11.4 billion ($17,210,580,000.00 US) in 2012 and is expected to rise to at least £13 billion ($19,626,100,000.00 US) this year.

Investments totaling almost £100 billion ($150,970,000,000.00 US) are now in companies’ plans.

“Here is some really good news for the UK,” said Malcolm Webb, chief executive, Oil & Gas UK. “After two disappointing years brought about by tax uncertainty and consequently low investment, the UK continental shelf is now benefitting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades. The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government’s ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment.”

The number of projects submitted to the Department of Energy and Climate Change, and given development approval, almost doubled between 2011 and 2022 to 33, valued at £13.4 billion ($20,229,980,000,000.00 US).

Exploration grew dramatically from 21 wells per year prior to the tax cut to 130 projected over the next three years.

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MACC can dispatch speakers to all parts of Alaska to talk to groups and employees about the need to meaningfully reform Alaska’s oil taxes. To schedule a presentation, contact Julianne at MSI Communications.

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