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North Sea a burden on UK taxpayers
Figures from HM Revenue & Customs (HMRC) have shown that the North Sea has cost taxpayers more than £300mn over the past financial year, according to a recent report in The Times. Oil and gas companies have paid less in taxes in 2016–2017 because of lower oil prices, continuing investment and cuts in tax rates. Tax rebates issued to companies as relief on the costs of decommissioning and other expenditure also exceeded the taxes paid for the first time. This resulted in a decline in government revenues from oil and gas production to –£312mn in 2016–2017, compared to +£151mn in 2015–2016.
The industry has contributed £10.9bn in taxes as recently as 2011–2012, but revenues have since fallen sharply every year. Concerns were raised that with more North Sea fields coming to the end of their lives and as decommissioning of old infrastructure increases, the North Sea could become a burden in future. The Oil and Gas Authority has estimated that the eventual bill for North Sea decommissioning is likely to be between £60bn to £83bn.
Petroleum Review will be taking a closer at decommissioning issues in its October 2017 issue.
News Item details
Journal title: Petroleum Review
Countries: UK -
Subjects: Policy and Governance, Decommissioning, Oil and gas, Exploration and production, Energy policy
