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UKCS tax rate reduced in response to high costs and falling oil prices


UKCS tax rate reduced in response to high costs and falling oil prices

Report summary

On 3 December the marginal tax rate for new fields on the UKCS was reduced for the first time in 15 years. Our analysis shows the firm fiscal changes are encouraging, but not enough to push marginal projects over the line.

We use scenarios to illustrate how further step-changes in SCT could impact project economics. Oil price will be fundamental in dictating project returns. As such the government will have to respond to downward price changes if it wants the UKCS to remain globally competitive.

What's included?

This report includes 2 file(s)

  • UKCS tax rate reduced in response to high costs and falling oil prices PDF - 290.59 KB 5 Pages, 0 Tables, 3 Figures
  • UKCS tax rate reduced in response to high costs and falling oil prices.xls XLS - 103.50 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.

  • Introduction
  • Supplementary Charge Tax decreases
  • Ring Fence Expenditure Supplement
  • Cluster Allowance
  • Implications
    • The UKCS roadmap – shifting from maximising tax take to maximising recovery
  • Significant tax rate changes may be needed
  • Conclusions

In this report there are 3 tables or charts, including:

  • Introduction
    • A high cost and falling price back-drop
  • Supplementary Charge Tax decreases
  • Ring Fence Expenditure Supplement
  • Cluster Allowance
  • Implications
    • Value shift for the UK oil and gas industry
  • Significant tax rate changes may be needed
    • Scenarios: Marginal, high cost projects impacted severely
  • Conclusions
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