The chancellor should use this month’s Autumn Statement to boost investor confidence in the North Sea, trade group Oil & Gas UK has argued.
In a letter to Phillip Hammond issued on 7 November, the group said the North Sea industry was facing global competition in attracting investment and was confronting the combined challenges of a low price, a maturing industry, and continuing uncertainty. Specifically, the trade group warned that less than £100mn of fresh capital has been committed to the basin this year, with only one new field approved.
The letter called on the government to reaffirm its commitment to the Driving Investment fiscal strategy, to promote the increasing competitiveness of the basin as well as the UK supply chain, and to introduce measures that would enable tax relief to be transferred when an asset was sold.
Deirdre Michie, chief executive of Oil & Gas UK, said: “We urgently need to see new entrants encouraged into the market and increased asset trading is one area that could boost activity in the North Sea by facilitating the trading of late-life assets. But investors are also looking for certainty and we can’t underestimate the importance of government sending a strong signal of confidence and support.”