Northern Isles MP, Alistair Carmichael, is calling on the Government to use the upcoming Budget to deliver substantial tax changes for the oil and gas industry as the sector continues to face huge challenges.
Mr Carmichael is backing Oil and Gas UK’s call for tax reforms to boost competitiveness and maintain investor confidence. Oil and Gas UK – the trade association for the industry – have published a report of new forecasts which show that in the current price and business environment, more than one billion barrels of oil and gas are no longer considered economically viable to extract.
Oil and Gas have called for a 20% tax cut on production profits and the removal of the Petroleum Revenue Tax.
Commenting, Mr Carmichael said:
“The oil and gas sector is of massive strategic importance to the UK economy. The Government must intervene now with tax reforms to ensure its long-term viability. These are reasonable and measured asks from an industry that has bankrolled the Treasury for years and is now under the cosh. The Government must listen and act or risk seeing a tsunami of decommissioning in the North Sea.
“The industry is facing its most testing times for many years. We have already seen 65,000 job losses in the last year in the UK and several hundred in recent months at Sullom Voe in Shetland. Despite this, with the new Total plant finally producing gas at Laggan-Tormore and bringing in reserves from fields to the west of Shetland there are opportunities for growth – but only if the industry receives the support it badly needs.”