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Decommissioning relief for oil and gas companies: consultation

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HM Treasury is consulting on a proposal to create Decommissioning Relief Deeds specifying the levels of tax relief that companies will receive on the costs of decommissioning used assets in the North Sea.

Companies will also receive ‘new certainty’ on the level of relief they will receive when liable for the decommissioning costs of another party which has defaulted, the Treasury said: ‘Without increasing the forecast Exchequer cost of decommissioning, the government’s intention is to reduce significantly the level of security required when one party acquires the assets of another, or from companies operating together in fields. This will free up significant levels of capital for investment, increasing production and Exchequer revenues.’

Decommissioning Relief Deeds: increasing tax certainty for oil and gas investment in the UK Continental Shelf invites comments by 1 October 2012.