HISTORIC PRESS RELEASE : Boost To North Sea Exploration [January 2004]

The press release issued by HM Treasury on 20 January 2004.

Exploration in North Sea oil and gas was given a further boost by proposals announced today by Paymaster General Dawn Primarolo.

Building on an announcement in the Pre-Budget Report, the Government is introducing a new Exploration Expenditure Supplement, effective from 1 January 2004, to help promote exploration and investment in the North Sea.

The supplement will be available for up to 6 years, at an annual rate of 6 per cent compound interest on unused allowances. This will maintain the value of existing 100 percent allowances for new entrants unable to make immediate use of them.  As a result of the supplement, the overall tax relief available to these companies could increase by up to 41 per cent.

Speaking to representatives of the oil and gas industry in Aberdeen, Dawn Primarolo said:

“The North Sea oil and gas industry is a vital contributor to the UK economy. The new Exploration Expenditure Supplement will ensure new entrants get support for the important early stages of investment. This builds on the existing 100 per cent first year capital allowances introduced in 2002 for investment in the North Sea and will help to ensure a sustainable future for the UK’s oil and gas industry.”