NORTH East Liberal Democrat MPs Malcolm Bruce, for Gordon and Sir Robert Smith, for West Aberdeenshire and Kincardine, took a delegation of oil and gas executives to meet with Energy Secretary Chris Huhne last week to make a case to make for offshore tax reforms to promote future investment in the sector, and help simplify bureaucracy.
The MPs called on the Secretary of State to work hand-in-hand with the Treasury to achieve a satisfactory outcome for the industry, which would encourage investment and in turn, help benefit the national economy.
After the meeting Malcolm Bruce MP said “I was concerned when industry reps told the Secretary of State that up to ten 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.”
Mike Tholen, the Economics and Commercial Director of Oil and Gas UK who also attended the meeting described the talks as ‘constructive’, and as having reinforced engagement between the industry and the Government on the issue of maximising recovery of the UK’s very significant remaining reserves
“The Secretary of State, Mr Hume, showed a strong commitment to work with industry and find new means to promote investment, despite the recent tax increase”, he said. “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.”