Tax change prompts JX to invest in UK oil and gas fields
8 Jan 2013
London – JX Nippon Exploration and Production (U.K.) Ltd is to acquire a number of interests in UK oil and gas fields – a move, it said, that was prompted by changes to the UK tax regime.
The company’s UK ambitions had been tempered until recently by what it described as adverse tax changes, which made it very challenging to justify such a major investment. However, it said, recent collaboration between industry and government has begun to ameliorate the situation.
The investment aims to consolidate the UK as an important long-term profit centre for the company, according to David Nash, executive director at JXNEPUK
“The introduction of field allowances and steps being taken by the government to provide certainty on decommissioning tax relief contributed to our decision to finally proceed with this acquisition,” he said. “We look forward to continuing pragmatic responses to encourage further investment in the future.”
Welcoming the investment, by Malcolm Webb, Oil & Gas UK’s chief executive, who said: “Recovering the 24 billion barrels of oil and gas that remain on the UK continental shelf (UKCS) will bring jobs and tax revenues to Britain.
According to Webb, engagement with the Treasury over the last 18 months has brought forward several measures designed to promote investment.
The measures, he said, include tax allowances for new and existing projects with difficult economics and the decommissioning relief deed which aims to provide certainty on decommissioning liabilities.
