UK oil fields to close without tax breaks

[Eric Arthur]

The current low prices mean that 67,000 jobs have been lost already, more will go, and UK oil fields will be shut down forever unless Osborne removes the extra profit taxes that the oil companies pay.

 

This is an industry that the UK can be competitive in, and is essential to us all so let's hope that the Chancellor does the right thing in the Budget.

 

http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4679202.ece

 

Key North Sea oilfields could be abandoned and lost for ever if George Osborne does not cut the taxation of UK oil producers in the forthcoming budget, the chief executive of Centrica has warned.

Iain Conn has written to the chancellor urging him to act in the budget next month and suspend the supplementary tax charges paid by oil companies on top of corporation tax.

 

“I have only seen a fall in oil prices like this once before. The North Sea is really hurting. The government needs to be agile here. It needs to encourage companies to keep their fields going and keep their people,” he warns in an interview in The Times today.

 

Oil & Gas UK estimates that 65,000 jobs have been lost in Britain since the collapse of international crude prices in 2014. Further job losses are expected to be announced tomorrow when BP posts its fourth-quarter results. The oil company is forecast to announce a 67 per cent decline in profits.

 

Mr Conn, who spent 29 years at BP, including a period as chief executive of the group’s downstream business before joining Centrica, the owner of British Gas, last year, warned that without support in the budget “people will decide to accelerate decommissioning of platforms” in the relatively high-cost North Sea.

 

“The problem is once you decommission a platform all the satellite deposits around them can never be economic,” he said. “Normally you have one central piece of equipment that gets built for a big field and then over time all the little ones feed into it and keep it going. If you take that infrastructure away, all the little ones cannot be developed. They just become subeconomic.”

[Berberis]

Screw them. The petrochemical industry has profited massively over the years and hedged their profits into tax havens to boot. Now oil is cheap, they can't afford it. I bet they are crying into their solid gold cereal bowls.

[Eric Arthur]

Screw them. The petrochemical industry has profited massively over the years and hedged their profits into tax havens to boot. Now oil is cheap, they can't afford it. I bet they are crying into their solid gold cereal bowls.

 

That's not very helpful for the people losing their jobs or the rest of us who lose more energy security to Russia and Nigeria. As the oil man said

“The government has to be really thoughtful about taxation in the North Sea,” Mr Conn said. “They can always put it up again — indeed, they have quite a good record of doing that. But right now there is a case to be made that corporation tax in the North Sea should just be corporation tax and that petroleum revenue tax should probably disappear for a while.”

Edited February 1, 2016 by Eric Arthur

[Berberis]

Oh cry me a river.

 

The oil taken from the fields off the UK is sold on the open market and the UK purchases its oil/gas from the same market. We do not wholly reply on any one country, not to mention if anything did change, these fields are still there.

 

Oil companies have been profiteering for generations. They should not be given any special treatment.

[RonJeremy]

We, as a country have been "profiteering" from the tax revenues. They have received special treatment for years. Special, as in heavily taxed.

I feel bad for the employees and the shareholders, pension funds etc..

We should also consider all those who supply goods to the oil industry to assist in its extraction, and the good people of Aberdeen who are suffering too.

[999tigger]

What makes them any different from the steel industry?

 

Btw I am not averse if they cna find soemthing which makes sense, but you should have equal treatment.

Edited February 1, 2016 by 999tigger

[geared]

I agree there'd be a massive public outcry if the government started giving tax breaks to the oil industry because they're 'in trouble'

I'm sure they've got a mountain of cash to fall back on when times are hard.

 

The oil fields are coming to the end of their life anyway, they probably would have closed several years ago, but the massively inflated price of oil kept them profitable for abit longer.

[Eric Arthur]

The oil taken from the fields off the UK is sold on the open market and the UK purchases its oil/gas from the same market. We do not wholly reply on any one country, not to mention if anything did change, these fields are still there.

 

First try reading the thing that you have an opinion on. I'll copy it again.

 

Mr Conn, who spent 29 years at BP, including a period as chief executive of the group’s downstream business before joining Centrica, the owner of British Gas, last year, warned that without support in the budget “people will decide to accelerate decommissioning of platforms” in the relatively high-cost North Sea.

 

“The problem is once you decommission a platform all the satellite deposits around them can never be economic,” he said. “Normally you have one central piece of equipment that gets built for a big field and then over time all the little ones feed into it and keep it going. If you take that infrastructure away, all the little ones cannot be developed. They just become subeconomic.”

[truman]

Oh cry me a river.

 

not to mention if anything did change, these fields are still there.

 

.

 

Without maintenance won't they deteriorate?

[Berberis]

Without maintenance won't they deteriorate?

 

Not the capped wells. The rigs will be brought into port or reprovisioned elsewhere.