Treasury sources said the Government has agreed to deliver the certainty that the industry has been demanding over who will pay the £30bn bill for dismantling old platforms. Current tax relief of between 50pc and 75pc of rig decommissioning costs will be locked in through a financial contract signed between companies and the Exchequer, George Osborne is expected to reveal in the Budget. The contract will remove the risk of future governments lowering or even scrapping relief limits in an attempt to gather more tax, giving the industry permanent guarantees over the cost of winding down old infrastructure. Independent estimates suggest that certainty over decommissioning tax relief would lead to the recovery of 1.7bn barrels of oil and gas equivalent that would otherwise be left in the ground. Mike Tholen, of industry body Oil & Gas UK, said: “The additional recovery of the UK’s oil and gas would drive growth by securing highly skilled jobs, supporting energy security and driving additional capital investment, in our view, to the tune of tens of billions of pounds.”
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