North Sea Oil and Gas Taxation and Activity Levels

Impact

Description of impact

Research at the University of Aberdeen on the economics of North Sea oil and gas activity levels and the potential effects of tax changes on exploration and development decisions — and thus on total investment — have informed government and the oil industry of the virtues of ensuring that the tax system produces the appropriate balance between investment incentives and tax revenues.

In particular this work demonstrated the need to accommodate the differential impact of the tax system across offshore fields located in different geographic regions of the UK Continental Shelf (UKCS) which have varying cost characteristics, and the consequent need for tax allowances to avoid investment disincentives and to promote maximum economic recovery.
Impact statusOpen