Clifford Chance
Budget 2012 - Decommissioning Certainty
22 March 2012
As expected, Chancellor George Osborne confirmed in the Budget the Government's commitment to provide reassurance on the level of tax relief for the cost (estimated to be in the tens of billions) of decommissioning oil and gas fields.
This is good news for the industry and goes some way to make up for the pain from last year's Budget (when the supplementary charge on oil profits was increased from 20% to 32%).
Certainty on the tax treatment of decommissioning costs should help boost investment and M&A activity in the North Sea (particularly from smaller companies wishing to tap the remaining reserves in the more mature fields).
