North East MPs make case for Oil and Gas reforms to Huhne
July 15, 2011 12:53 PM
North East MPs Malcolm Bruce and Sir Robert Smith today took a delegation of oil and gas executives to meet with Energy Secretary Chris Huhne and make the case for adjustments to future field allowances with a view to encouraging future investment in the sector and simplifying the bureaucracy surrounding the tax regime.
As the guardians of the UK's offshore oil and gas assets, the MPs called on the Secretary of State to work hand and hand with the Treasury on achieving a satisfactory outcome for the industry which would encourage future investment to the benefit of the national economy.
After the meeting Malcolm Bruce MP said:
"I was concerned when industry reps told the Secretary of State that up to 10 million barrels of oil equivalent could be lost if the right licensing and tax regime is not in place in the North Sea. This is a staggering figure but I was encouraged by the response of the Secretary of State when he said that the Government was keen to get as much investment going as possible and that getting an agreement on decommissioning would be a 'good place to start'.
"Of further concern was the claim by the industry that some of the recent data used for analysis by the Treasury was 'inaccurate'. Furthermore they also raised the issue that no investment was going into fields paying petroleum revenue tax when more than a billion pounds a year had been planned."
"I am optimistic following the meeting since it was agreed that officials from the Department of Energy and Climate Change and industry representatives will meet to work on the issues of tax, decommissioning and economic opportunities for the industry over the coming weeks and months."
Sir Robert Smith MP added:
"The important outcome from this meeting is the agreement to share information so that government and industry are making decisions that are fully informed. It is vital to recognise that this isn't just a big financial industry; it is a major source of manufacturing and jobs which can play a vital role in growing the local and national economy."
Mike Tholen, the Economics & Commercial Director of Oil & Gas UK who attended the meeting said:
"Oil & Gas UK's meeting today with the Secretary of State for Energy was constructive and reinforced the engagement between the industry and the Government on the important issue of maximising recovery of the UK's very significant remaining reserves of oil and gas.
"The Secretary of State showed a strong commitment to work with industry and find new means to promote investment, despite the recent tax increase. He also expressed a commitment to address the pressing issues regarding uncertainty on decommissioning, which we applaud.
"Oil & Gas UK believes it is imperative that extended and new field allowances and arrangements to resolve the heightened uncertainty in the fiscal regime around decommissioning must continue apace, so that investors' confidence in the UKCS, which was so severely shaken by the recent Budget, can begin to be restored."