© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
July 7, 2014 12:04 am
Companies drilling for oil and gas in the North Sea should be subject to lower, simpler and more predictable taxes, according to a review commissioned by the Scottish government.
Melfort Campbell, a former engineering executive who now carries out work for the oil producers’ trade body, has recommended changing the tax and regulatory regime to encourage more companies to drill.
Mr Campbell said that with oil and gas increasingly expensive to extract from the UK continental shelf (UKCS), producers needed extra incentives.
“The UKCS used to be like an exclusive nightclub with bouncers on the door only allowing celebrity VIPs access,” he said. “Now, it is more akin to a trattoria with waiters touting for business on the pavement outside.”
The recommendations echo those of Sir Ian Wood, who looked at the issue for the UK government. Sir Ian suggested simplifying the North Sea tax regime and encouraging greater collaboration between drilling companies. He said his reforms would generate an extra 4m barrels of oil over 20 years, worth £200bn to the British economy.
North Sea revenues have been a key issue in the independence debate. Scottish ministers have said they would be able to collect more tax from the industry than the British government does – an important part of their claim that independence would make Scots £1,000 a head better off .
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in