UK mini-budget: Oil and Gas industry welcome N. Sea investment drive

north-sea-oil-rigThere was a ‘two-cheers, but…’ response to Chancellor Phil Hammond’s first mini-budget from the Aberdeen-based Oil and Gas UK industry association.

While Scott Lehmann, VP of Marketing at Petrotechnics,the operational solutions-provider to the oil and gas industry, commented on Hammond’s re-announced N. Sea Investment Drive: 

‘In his Autumn Statement the Chancellor reinforced that commitments made to the UK North Sea oil and gas sector in the March Budget still stand.

“While this is good –  it’s not enough. More measures are needed to support a sector that is severely resource-constrained.

“Operators are facing immense pressure to do more with less while maintaining safe, efficient operations. This prioritisation of limited resources is creating a growing maintenance backlog for North Sea assets. 

“The result of this could be lessened with additional measures to provide much needed breathing room for operators to address underlying inefficiencies.’

While for global oil goliath Shell, Paul Goodfellow, Vice President for Upstream, UK & Ireland, commented:“This Autumn statement, which formally recommits the government to the ‘Driving Investment principles’ will help in delivering a strong and sustainable future for the North Sea.

“The oil and gas industry will continue to work in partnership with government and the OGA to improve competitiveness and to safely reduce our cost base in the low oil price environment.”

Deirdre Michie, Chief Executive, OGUK, added: “We are pleased to hear the Chancellor re-commit to HM Treasury’s Driving Investment plan today.

“This sends a strong signal to investors that the government recognises that the UK oil and gas tax regime needs to be predictable and internationally competitive.

“Treasury forecasts show our industry will be contributing £10 billion more in production taxes over the next five years than was previously expected.

“While this can be attributed in part to changes in commodity prices and exchange rates it also reflects the significant work of industry to make our operations more efficient and to increase production.

“Our industry can make a vital contribution in delivering the Chancellor’s ambitions for the economy and the government’s industrial strategy. We are developers of cutting edge technology, providing highly skilled jobs, helping power to the nation and exporting to the world.”

But she added: “The sector is still in urgent need of fresh investment and we need government to keep working with us to ensure a competitive business environment.

“We will continue to work with Treasury on the important issue of decommissioning tax relief, key to stimulating investment and activity for the supply chain, which we hope to see resolved by the 2017 Budget.”

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