Alan McCrae, PwC’s UK head of energy tax, comments on the UK Government’s focus on breaking down decommissioning barriers in today’s Budget:
“Unquantified decommissioning liabilities, along with lack of clarity over forward oil prices, have had a major impact on deal flows across the North Sea in recent years. If we are to maximise the lifespan of the basin, it’s vital that these barriers are unblocked, enabling assets to move to companies that are likely to invest in the medium to longer term – before they find alternative uses for their capital elsewhere.
“Against this backdrop, we welcome the Chancellor’s focus on late-life assets and the potential for buyers of assets to access decommissioning tax refunds which would otherwise not be accessed on an asset deal. This is a complex issue and I’d encourage industry and wider stakeholders to actively participate in the process over the coming weeks and months in the hope that an agreement can be quickly reached on the way forward.”