Oil and gas news from the United Kingdom
The United Kingdom government has announced incentives to stimulate oil and gas investment on the UK Continental Shelf (UKCS) with the incentives targeting small and challenging petroleum projects. Along with the incentive announcement came a reminder for the oil and gas industry that additional measures to continue improving existing fields are necessary to maximize oil and gas recovery.
The CEO for Oil & Gas UK, Malcolm Webb, offered a number of comments on the government actions. He said, “We acknowledge this demonstration of the Government’s commitment to the future of this industry in the UK. The measures announced today are a positive step for those companies trying to develop small and challenging fields in this mature, high cost province. However, we now need to direct our attention to sustaining and promoting investment in and around many of our older fields to prolong their lives, to stimulating exploration activity and to opening up the frontier areas west of Shetland and in that regard, we welcome the Government’s offer of a continued dialogue.”
Webb went on to add reducing the tax burden on UKCS production was a step in the right direction, but he was disappointed the government didn’t improve the equity market access for smaller companies involved in oil and gas exploration.
The incentive announcement came from Alistair Darling, Chancellor of the Exechequer, who said the incentives will come in the form of field allowances from the Treasury to companies developing new fields off the Bristish coast. One potential issue industry analysts have identified concerning the incentive program is that field allowances are granted after a field is successfully developed and are already producing. This condition means investors in new oil and gas fields will carry all the commercial risks in the new projects.
Sources used in this post include OilVoice and Lloyd’s List.
Published Monday, April 27th, 2009 at 10:32 am and filed under Industry News.