The idea of taxpayers paying for oil firms' decommissioning bills has been an ongoing issue we’ve tried to grapple with at EV – easily misrepresented because it's confusing.
The way analysts and commentators have explained it to me over the years is as follows...
The way analysts and commentators have explained it to me over the years is as follows...
https://twitter.com/heliaebrahimi/status/1491139984879144960
In previous years, oil companies have paid more tax than they were due to – they’ve put money into the Treasury over and above their annual requirement.
When they get to the point of decommissioning – which is so costly that it effectively wipes out their profits...
When they get to the point of decommissioning – which is so costly that it effectively wipes out their profits...
..they then claim a rebate back from the Treasury which is used to justify their expenditure.
That is not “fresh” money, it should have been sitting there for them to claim back. So, in effect, there is no net cost to the taxpayer.
That is not “fresh” money, it should have been sitting there for them to claim back. So, in effect, there is no net cost to the taxpayer.
It’s a Treasury cash flow issue, not a loss. The industry argues that decom is a genuine business expense, hence why the regime is what it is.
#NorthSea #WindfallTax
linkedin.com/posts/sinead-l…
energyvoice.com/oilandgas/nort…
#NorthSea #WindfallTax
linkedin.com/posts/sinead-l…
energyvoice.com/oilandgas/nort…
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