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Government reaffirms commitment to Gas and Oil sector

During a recent visit to Aberdeen, the Prime Minister David Cameron has again made clear his government’s commitment to the UK gas and oil sector, with the announcement of an action plan to build a stronger future for the industry.

As well as the action plan there is to be a 1.3 billion package of tax measures for the gas and oil sector to help the UK industry to stay competitive. A number of other steps have been introduced, which include the announcement of £20 million in funding to allow for additional seismic exploration; this will help the gas and oil industry to find potential new sources of reserves.

In addition, a new Gas and Oil Ambassador is to be appointed to enable UK companies to better market their services overseas. The Ambassador will be responsible for promoting the North Sea to countries around the globe and for increasing investment; an export target for the gas and oil industry will also be set.

Commenting on the announcement by the Prime Minister, Amber Rudd, the Secretary of State for Energy and Climate Change said:

“We’re stepping in to provide the extra support needed now with £20m of funding for seismic exploration to help industry find new oil and gas reserves. But we’re also determined to build a bridge to the future and make sure the expertise we hold in areas such as decommissioning can become a UK success story, boosting our economy, supporting jobs and creating more financial security for families.”

“Work to be Done”

While the decision to invest more into seismic exploration and the further government announcements were welcomed by Oil and Gas UK, its Chief Executive Deidre Michie added that there was still more work to be done if the United Kingdom was to become “the most attractive, mature oil and gas province in the world to do business in”.

Michie also stated that the sector needed to do more to reduce inefficiencies and costs, and said that fiscal and regulatory measures would be necessary to help transform the sector and make it more attractive to global investors.

The Oil and Gas Chief Executive went on to say:

“The 2016 Budget needs to deliver an effective package of measures to help extend late life operations and asset trading, promote exploration and boost investment. In line with HM Treasury’s own strategy of continued fiscal reform, steps should also be taken in the Budget to deliver a further permanent cut in the headline tax rate.”

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