Today, in his budget the Chancellor announced two developments
which should pave the way for billions of pounds of future
investment into the North Sea. After the shock of the 2011 increase
in the supplementary charge, the 2012 budget represents the outcome
of a much more positive engagement over the last year between
Government and industry to tackle the issues of working in a mature
basin.
Decommissioning security – the impact of uncertainty
over tax relief
Decommissioning presents one of the largest challenges for
companies wishing to invest in North Sea oil exploration and
production. Future costs are currently estimated at around
£30 billion, as many offshore installations near the end of
their working lives. Certainty over tax relief will ensure that the
North Sea remains attractive to investors and is likely to be
welcomed in an industry where fiscal instability has led to
concerns over growth and where exploration activity has halved and
annual production
