Insight
| |
8 Pages

UK Budget 2016: a competitive tax regime for an ultra mature basin


UK Budget 2016: a competitive tax regime for an ultra mature basin

Report summary

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.

What's included?

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

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

Proprietary data means a superior level of analysis that is simply not available anywhere else. Wood Mackenzie is the recognised gold standard in upstream commercial data and analysis.

  • Executive summary
    • Background
    • SCT reduction
    • PRT zero rated
    • Investment/Cluster/Onshore allowances
    • Implications
    • Model field analysis
      • Company and project value impact
    • How does Budget 2016 impact exploration?
    • Retained decommissioning liabilities – Budget brings tax relief certainty

In this report there are 9 tables or charts, including:

  • Executive summary
    • Value transfer for the UK
    • Marginal tax rate
    • Government share with varying oil price
    • IRR with varying oil price
    • Government share and IRR at US$60/bbl: varying project cost base
    • International fiscal comparison
    • Project impact
    • Company impact
    • Retained decommissioning liabilities
Requester's name : .............
Department : .............
Authoriser's Name : .............
Authoriser's signature : .............
Date : .............
Cost Centre : .............

Questions about this report?

Frequently Asked Questions

Mailenquiries@woodmac.com
  • Europe: +44 131 243 4699
  • Americas: +1 713 470 1900
  • Asia Pacific: +61 2 8224 8898
contact us

Why Wood Mackenzie?

Wood Mackenzie, a Verisk Analytics business, has been a trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, empowering clients to make better strategic decisions with objective analysis and advice.

We work across every sector of oil, gas, power, renewables, chemicals, metals and mining, covering more than 150 countries. Our proprietary data and models are at the core of everything we do, ensuring our independent asset and company valuations are thoroughly robust and that we offer an accurate forward-looking view of economic indicators such as market supply, demand and price trends.

Our 500+ analysts are based in the regions they cover, cultivating an unrivalled depth of understanding to help clients accurately identify new opportunities, define their strategy and improve business performance.

At every stage, our teams readily collaborate and share their insight to provide an integrated perspective across entire industries. It is this unique and rigorous analytical approach that ensures we are recognised as the industry standard by the world’s most innovative organisations.