North Sea change of use working group – a technical discussion paper
HM Revenue & Customs (HMRC) has today (Thursday 31 July 2008) published The North Sea Fiscal Regime and the reuse of oil and gas infrastructure – a technical discussion paper (PDF 188K). This follows on from the continuing work of the joint working group comprising HMRC, the Oil and Gas Industry and BERR, which was originally set up to consider how current tax legislation would apply when North Sea oil and gas infrastructure is used for other purposes, such as carbon capture and storage, wind power and gas storage.
This discussion paper follows on from the publication of 'Platform for change' in November 2007, which was primarily a technical paper detailing how the current legislation would apply when oil and gas infrastructure is used for other purposes. However, during the course of the discussions, the oil and gas industry made suggestions about areas where they thought the current tax rules either acted as a barrier to change of use projects, or more widely where they thought Government needed to provide greater tax incentives to get some of the projects off the ground. Industry’s proposals are contained in an annex to the main Platform for Change document.
This discussion document starts to look at some of the key issues raised by industry in more detail, and to examine how significant they are to the viability of change of use projects in the North Sea. It is intended that it will provide the basis for the next phase of work to be undertaken by the working group, by considering in greater detail the key tax pressure points on any change of use of North Sea infrastructure, assess the case for legislative change and the options that might be considered.
HMRC would also welcome comments and contributions from those who have an interest in change of use projects and their interaction with the North Sea fiscal regime, who may not have been involved in the original Change of Use Working Group.
If you have any comments or contributions, please contact:
Mike Crabtree
Head of North Sea Policy Team
LBS Oil and Gas
22 Kingsway
London
WC2B 6NR
Tel: 020 7438 6576
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