Offshore Industry: Decommissioning

HM Treasury written question – answered on 2nd November 2015.

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Photo of Baroness Worthington Baroness Worthington Shadow Spokesperson (Energy and Climate Change)

To ask Her Majesty’s Government what measures are in place to limit the exposure of the public purse to costs arising through reliefs and repayments of Ring Fence Corporation Tax, Petroleum Revenue Tax, and the Supplementary Charge, incurred by the decommissioning of North Sea oil and gas infrastructure.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

The Government believes in making the most of the UK’s oil and gas resources – to date the oil and gas industry has contributed £330bn to the Exchequer and is the UK’s largest industrial investor, supporting hundreds of thousands of jobs, supplying a large portion of the UK’s primary energy needs and making a significant contribution to GDP. With between 11 and 21 billion barrels of oil equivalent still to be exploited, the UK Continental Shelf can continue to provide considerable economic benefits for many years to come.

The Government is committed to ensuring decommissioning programmes represent value for money, which is why we have introduced provisions through the Energy Bill to:

  • require decommissioning programmes to be cost effective;
  • ensure the Oil and Gas Authority has the powers it needs to scrutinise companies’ decommissioning plans to ensure they are cost effective; and
  • enable the Secretary of State to require a company to take specific action to reduce the costs of decommissioning to address cost overruns.

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