Oil bosses in call for tax cuts
By Ian Fraser
Published: The Sunday Times
Date: April 19th, 2009
Oil industry bosses are urging Alistair Darling, the chancellor of the exchequer, to ease the tax burden on North Sea oil and gas companies or risk more than 50,000 job losses in the industry, centred on Aberdeen.
Sir Ian Wood, chairman of Wood Group, is calling for the UK government and the industry to work together to develop an emergency plan to minimise a serious loss of momentum. He is calling for specific measures to promote exploration and appraisal drilling, to encourage new small field developments through cuts in supplementary corporate tax, and the introduction of measures to boost the liquidity of the smaller industry players who are struggling under the weight of the credit crunch.
Sir Ian said: “This is all about encouraging investment over the next year to 18 months, to get us through what is a more difficult period and preventing what will otherwise be a much steeper downturn.”
Alistair Birnie, chief executive of Subsea UK, said: “We need tax concessions so operators are encouraged to invest in current and future projects in order to prolong the life of the North Sea, stimulate activity and revenue throughout the supply chain and, in turn, maximize tax revenues to the treasury.
“The upstream oil and gas sector is just as strategic as any bank. If oil and gas stop flowing, utilities and power stations will be unable to meet demand, with a massive impact on the UK economy.”
Malcolm Webb, chief executive of Oil and & Gas UK, has said a major decline in the industry over the next one to two years would probably be irreparable.
To read this article on Times Online click here.
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