Oil & Gas UK has welcomed the UK Government’s commitment to maintain fiscal conditions in recognition of industry’s hard work in improving its competitiveness, following the publication of the government's 2018 Budget this afternoon.
Chancellor, Phillip Hammond announced that the current headline tax rate will continue. He also stated that the UK government will launch a call for evidence on its plans to make Scotland a global hub for decommissioning.
It comes after Oil & Gas UK recently revealed that 11 projects have been announced by companies this year – more than the last three years combined, with more expected in the coming months.
Speaking in response to the Budget, Oil & Gas UK chief executive, Deirdre Michie said: “The Chancellor’s commitment to fiscal stability is welcome recognition of the hard work by industry to encourage recovery following one of the most testing downturns in its history. “With reduced costs, competitive fiscal terms and improved operational performance, the UK Continental Shelf is becoming an attractive investment proposition. These conditions are delivering a tentative recovery, with more projects approved so far this year than in the last three years combined.
“It’s important that this stability is sustained for the longer term, encouraging further investment and much needed new business for the supply chain, which continues to be under pressure.
“Essential for security of supply, supporting hundreds of thousands of highly skilled jobs and contributing billions to the economy, the UK’s offshore oil and gas industry will continue to play a vital role in the economy for many years to come.”
The decommissioning market in the North Sea is forecast to grow steadily and is likely to be worth £1.8bn per annum on average over the next decade.
Commenting on the call for evidence on decommissioning, Deirdre Michie added; “As decommissioning activity is predicted to grow, the UK supply chain has a major opportunity to develop world-class decommissioning capabilities. We look forward to informing this exercise with our expertise and ensuring that we can maximise opportunities in decommissioning while continuing our focus on maximising economic recovery.”