The SNP’s Energy Spokesman in the House of Commons has called for provisions on oil and gas decommissioning tax relief schemes to ensure Scottish and UK businesses will have priority on future contracts worth £46 billion pounds.
Calum McCaig, MP, has written to the Secretary of State for Energy and Climate Change, Amber Rudd, calling for clarity on whether the government plans to take any steps to ensure decommissioning tax relief schemes could benefit UK supply chain companies. He said:
“Oil and gas industry bodies forecast that £46 billion will be spent on decommissioning between now and 2040, and I want to know what the Westminster government plans to do to ensure Scottish and UK supply chain companies are given priority for such high value work opportunities,
“The conditions of tax relief schemes will have serious implications in deciding which companies are employed to decommission offshore assets in the North Sea.”
The undertaking of decommissioning work along the UKCS is significant and includes 470 surface and subsea installations; 10,000km of pipelines; and 5,000 wells. Over 90% of forecasted expenditure is set to be spent on installations that have already been sanctioned for decommissioning.
He added: “With contracts worth billions of pounds each year it would seem pertinent, if not obvious, for the UK Government to ensure as much of that money as possible is circulated back into our home economies.
“The best way to do that is by ensuring tax reliefs are directed to companies whose intention is to hire Scottish and other UK supply chain businesses.
“Expenditure in the UKCS on decommissioning could double in just three years. Action needs to be as swift as possible to prevent billions being lost to companies overseas.”