Scottish Energy Minister Fergus Ewing will today (13 Jan) update industry leaders on the Scottish Government’s call for urgent reform of the taxation regime for North Sea oil and gas – and call on UK Energy Minister Matt Hancock to take forward the proposals.
Speaking ahead of the PILOT meeting in London which brings together government and industry representatives – and which UK Minister for Energy Mathew Hancock is expected to attend – Ewing said:
“The oil and gas industry is a strong success story for Scotland and will continue to be. However, because of the mismanagement of oil and gas fiscal policy by the UK Government, challenges remain and we must tackle the on-going cost pressures and the fall in oil prices head on.
“Last week the Scottish Government published a new report setting out a range of taxation changes and we will now consult closely with industry on these proposals.
“Today I re-iterate our call for urgent reform to the UK Energy Minister, and set out the detail of our plans to industry leaders.”
“We are continuing to challenge the UK Government to maintain the momentum for fiscal and regulatory change in the oil and gas sector, both of which also were recognised by Sir Ian Wood as, critical to prolonging the life of the industry beyond 2050 and maximising the total value generated in the economy.
“I am confident that our proposed fiscal changes will not only boost the economy but analysis based on industry data shows that they will support thousands of jobs.”
PILOT is a joint programme involving the Government and the oil and gas industry, with meetings held twice a year.
The three key proposals from Scottish Government Oil and Gas Discussion Paper – Challenges, Opportunities, and Future Policy are:
• An investment allowance to provide a simple, stable and more completive fiscal regime;
• A phased and timetabled reversal of the increase in the Supplementary Charge implemented by the UK Government in 2011; and
• Introduction of an exploration tax credit to help increase levels of exploration and sustain future production.
Ewing added: “Last year the UK Government announced a 2% reduction of the Supplementary Charge rate – this reduction doesn’t go far enough.
“We are calling on the UK Government to provide a clear timetable to fully reverse the increase brought in in 2011. That will provide a strong signal for investors that the North Sea is open for business.”