At yesterday’s meeting with Shadow Chancellor Ed Balls and his team, Oil & Gas UK has underlined the urgent need for regulatory and fiscal reform and improvements in cost efficiency to restore the international competitiveness of the UK oil and gas industry.
Malcolm Webb, Oil & Gas UK’s chief executive, said:
“The UK oil and gas industry is suffering from high costs, years of under-resourced regulation and a tax burden of between 60 and 80 per cent, with the impact on competitiveness exacerbated by the collapse in oil prices.
“Indeed, Oil & Gas UK’s Activity Survey 2015 shows that exploration has fallen to levels last seen in the 1970s and capital investment is now at risk of falling by £3-4 billion per year over the coming three years.
“We took the opportunity today to advise the Shadow Chancellor of the progress that’s being made on regulatory reform with the establishment of the Oil and Gas Authority, the actions being taken by industry to reduce its high cost base and the urgency of significant and permanent changes to the tax regime.
“We informed Mr Balls that a simplified Investment Allowance, together with a double-digit reduction in the supplementary tax charge on the industry, is now required in order to improve the UK’s competitiveness and hence sustain investment in the future.
”It was a good meeting with Mr Balls and other members of the shadow team. I came away encouraged by their understanding of the challenges facing the industry and the steps that need to be taken to overcome these.”