The UK Government has announced a new tax relief to support gas investment in the UK Continental Shelf.
A £500m field allowance for large shallow-water gas fields, with water depths of less than 30m, will be established with the aim of attracting future investment in North Sea gas.
A new gas strategy will also be published by the government later in 2012, as part of its plan to provide certainty to investors on the UK’s long-term commitment towards gas.
Through the 2020s, and beyond if gas proves cheap, the government expects gas to continue to play a key role ensuring that the nation has sufficient capacity to meet everyday demands.
UK Chancellor of the Exchequer George Osborne said: "The government is signalling its long-term commitment to the role it can play in delivering a stable, secure and lower-carbon energy mix.
"At the Budget, we announced an ambitious package of support to stimulate billions of [pounds of] investment in oil and gas production in the North Sea. Today’s news is a further sign of the government’s determination to get the most out of a huge national asset."
A supplementary Charge (SC) tax rate of 32% will not be levied on the qualifying fields, but these fields will still pay 30% Ring Fence Corporation Tax on all income, in addition to SC on all income not protected by the field allowance.
