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