Investing on the UKCS
The UK Continental Shelf (UKCS) has a rich history of hydrocarbon exploration and production success.
The UK oil and gas industry supports around 330,000 jobs and is worth around £11billion to our economy each year. Significant hydrocarbon resources and economic value remain to be realised from the UKCS.
HM Treasury's Driving Investment Plan, published December 2014, sets out a radical plan to reward investment in the UKCS at all stages of the industry life cycle. It recognises that to maximise investment, we need to reduce the overall tax burden facing the industry, and establish long-term principles for the future that the government and industry can both buy into. It also includes specific actions to ensure a more competitive, simple and predictable fiscal regime.
On 23 November 2016, The Chancellor presented his Autumn Statement to Parliament – section 5.12 recommits the government to the Driving Investment Plan to ensure a stable tax regime that maximises economic recovery from the UKCS.
On 8 March 2017, The Chancellor presented the Spring Budget to Parliament. The Government announced it would publish a discussion paper on tax treatment of late-life North Sea oil and gas assets, considering the tax issues on the transfer of such assets to new investors and whether any changes to tax rules could facilitate transfers and support the Government and OGA's aim of maximising economic recovery.
The paper, 'tax issues for late-life oil and gas assets' was published on 20 April 2017 and consultation closes at 11:45pm on 30 June 2017. It can be found here. The Government has also established a panel of upstream oil and gas experts to enable a detailed debate on the issues identified in the paper.
We proactively engage with the global investment community to promote the UKCS and attract new sources of capital. We maintain continuous dialogue with the industry, regulators, investors, analysts, and other market participants.
Our engagement plan is set out outlined in our Corporate Plan 2016-2021 and two key priorities are to identify barriers to investment and to connect divestors with investors.
The current economic climate
The sharp decline in oil prices since June 2014 is affecting companies operating on the UKCS. These conditions have understandably led to companies, and their investors, re-evaluating their business in the UK.
We will do everything possible to make sure this vital UK sector receives the right support, working with government and the industry to address the immediate situation, while delivering further priorities that help bridge to the future. To that end, the OGA wants to maintain confidence in existing investment, prevent the unplanned removal of capital, and attract new investment into the basin.
Whether you are an existing investor, an interested party, or just looking for information on the UKCS, please contact us at email@example.com