Oil and gas companies get tax concessions

Oil and gas companies have persuaded the taxman into giving them more
favourable tax terms in exchange for keeping North Sea fields running longer
than expected.

Treasury announced the move yesterday, under the ‘securing a sustainable
future’ banner.

But critics view this as a move to maintain domestic energy supplies as
opposed to it being part of a green agenda, the
Guardian
reported.

The moves follow a long campaign from oil companies in particular to ease
their tax burdens.

Ministers have now proposed rules which allow oil and gas companies tax
concessions on the cost of dismantling platforms for profits made over the last
three years of a field’s life. As the fields approach the end of their supplies,
volumes and profits shrink, which in turn give an operator less to set against
tax.

The Treasury said this would likely lead to a number of cases of premature
decommissioning, which would mean less oil and gas supplies, as well as a drop
in tax revenue for the government.

Further reading:

Tax plan to extend life of North Sea oil fields

Government
to ease North Sea tax rules

Oil
industry applauds decision to extend North Sea tax breaks