Oil & Gas UK, the industry trade body, has reported that capital spending this year is forecast to race to its higher level in 30 years, with companies planning to spend at least £13 billion. New figures show that a recovery in North Sea oil and gas investment is set to generate £100bn of economic stimulus and hand the Chancellor a £25 billion bonus through extra tax receipts. Oil & Gas UK’s chief executive, Malcolm Webb stated, “Here is some really good news for the UK. After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf (UKCS) is now benefiting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades.’ “The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government’s ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead.” Companies looking for offshore energy invested £11.4 billion in 2012, said Oil & Gas UK, which comprises more than 320 companies active in the area. The assessment will be welcomed by George Osborne, the Chancellor, as an indication that his about-turn on tax increases for the sector is paying off.
