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The UK upstream oil and gas industry is going through a major cost reduction phase in response to continued low oil prices. However many operators are still in cash-flow negative position. Chancellor George Osborne announced three fiscal measures to support the United Kingdom Continental Shelf (UKCS). A reduction in the rate of Petroleum Revenue Tax (PRT) from 35% to 0%, a reduction in Supplementary Charge Tax (SCT) from 20% to 10% and an extension of the Investment and Cluster Area Allowances to include tariff income. We calculate a transfer of value (NPV10 at 1 Jan 2016) of the UKCS from the government to the companies, by around £3 billion, taking the company value from £26 billion to £29 billion.
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This report includes 2 file(s)
UK Budget 2016: a competitive tax regime for an ultra mature basin PDF - 408.84 KB 8 Pages, 1 Tables, 8 Figures
UK Budget 2016.xls XLS - 427.00 KB
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This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.
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Insight | Mar 2016
UK Budget 2016: a competitive tax regime for an ultra mature basin
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