Decommissioning Relief Deeds

Priti Patel Excerpts

Monday 21st July 2014 Written Statements

[The Exchequer Secretary to the Treasury (Priti Patel)]

At Budget 2013, the Government announced they would begin signing decommissioning relief deeds. These deeds represent a new contractual approach to provide oil and gas companies with certainty on the level of tax relief they will receive on future decommissioning costs.

Since October last year, the Government have entered into 61 decommissioning relief deeds (50 were signed in financial year 2013-14). Oil & Gas UK estimates that these deeds have so far unlocked at least £2.2 billion of capital, which can now be invested elsewhere.

The Government committed to report to Parliament every year on progress with the deeds. The report for financial year 2013-14 is provided below.

(a) The number of decommissioning relief agreements entered into—The Government entered into 50 decommissioning relief agreements in 2013-14.

(b) The total number of decommissioning relief agreements in force at the end of that year—Fifty decommissioning relief agreements were in force at the end of the year.

(c) The number of payments made under any decommissioning relief agreements during that year, and the amount of each payment—No payments were made under any decommissioning relief agreements in 2013-14.

(d) The total number of payments that have been made under any decommissioning relief agreements as at the end of that year, and the total amount of those payments—No payments had been made under any decommissioning relief agreement as at the end of the 2013-14 financial year.

(e) An estimate of the maximum amount liable to be paid under any decommissioning relief agreements—The Government have not made any changes to the tax regime that would generate a liability to be paid under any decommissioning relief agreements.