Petroleum Revenue Tax Exemptions For Restarting Decommissioned Fields In North Sea

The Treasury has announced that North Sea fields which are redeveloped following decommissioning will be exempt from petroleum revenue tax (PRT).

Trade and Industry Secretary Alistair Darling said:

"This is good news for industry and good news for our economy.

"Abolishing this tax should encourage investment in previously 'dead' fields and therefore lead to more oil and gas being harvested from the North Sea and the recovery of oil and gas which otherwise would remain beneath the sea."

North Sea oil and gas fields developed before 1993 are liable for PRT, which together with 50% special corporation tax rate brings the marginal tax rate paid by these fields to 75%.

The Government has also announced the creation of a joint working group with industry to examine the fiscal implications on the current North Sea regime in relation to changed and dual use of infrastructure in carbon capture and storage.

Posted 08/12/06

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