Darling offers oil companies £1bn tax perk
Shetland oil exploration becomes more enticing through tax relief
Cash-strapped chancellor Alistair Darling has offered offshore oil operators
tax perks worth nearly £1bn to encourage them to explore and develop oil and gas
finds west of Shetland.
He announced the extension of the New Field Allowance to £160m per field — a
concession so tightly drawn so it can only apply to those in deep waters on the
Atlantic fringe — before his spring budget to prevent another summer season
being lost before work can begin on the extensive infrastructure required.
Oil giant
Total,
leader of groups with two potential fields, stand to qualify for £320m in relief
and there are at least four more fields likely to qualify in the area between
Shetland and the Faroes in some of he most inhospitable waters in the world
which is thought to contain a fifth of the UK’s remaining oil and gas reserves.
The companies continue to face ring fenced corporation tax at 30% but will
not have to pay the additional 20 point surcharge until their allowance is
exhausted.
Further reading:
Tax
revenues receive boost from shares, oil and property