During his latest budget announcements, Chancellor Philip Hammond set out his plans for a Finance Bill for the oil & gas industry.
The announcement will allow North Sea oil and gas companies to receive tax breaks starting November 2018 with Transferable Tax History.
The plans will allow some companies to reduce decommissioning costs through the transfer of some corporation tax to new buyers of old oil and gas fields.
It is claimed that the North Sea still holds around 20 billion barrels of oil and so the Chancellor believes these kinds of incentives are a vital encouragement to its utilisation.
The government stated: “The government’s objective is to maximise economic recovery of its remaining oil and gas reserves while ensuring the nation receives a fair return on its hydrocarbon resources.”
“Extending the productive lives of late-life oil and gas fields is consistent with this objective as it could potentially lead to new investment, delaying decommissioning and supporting activity in the UKCS for longer.”
In addition to incentivising oil and gas production, the Chancellor has put £540 million toward electric vehicles and charging infrastructure along with tax increases on diesel cars.
The tax raised will go toward funding a new £220 million Clean Air Fund.