Tax changes to encourage growth in the UK oil & gas sector have led the industry to make its highest investment for more than 30 years.
According to the recently published Oil & Gas UK, 2013 Activity Survey, thousands of jobs are now being created across Britain and the production of UK oil and gas and resulting tax revenues can now confidently be expected to rise over the coming years.
The Activity Survey shows a diverse mix of investment, ranging from projects of less than £50 million through to some of over a billion pounds, in total soaring to £11.4 billion in 2012. This is now expected to rise even further to at least £13 billion in 2013.
Investments totalling almost £100 billion are now in companies’ plans. The prospect of investment on such a scale highlights the potential for the UK’s offshore oil and gas sector to boost economic activity and contribute to the country’s prosperity for many years to come.
Malcolm Webb, Oil & Gas UK’s chief executive, said: "Here is some really good news for the UK. After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf (UKCS) is now benefitting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades. The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the Government’s ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead."
Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members, who number over 320, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those in the industry’s supply chain.