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<p>The government is committed to this important industrial sector and to maximise
the economic benefits of our oil and gas resources in accordance with Sir Ian Woods
recommendations in his final report on maximising recovery on the UK Continental Shelf.</p><p>
</p><p> </p><p> </p><p>With between 11 and 21 billion barrels of oil equivalent still
to be exploited, the UK Continental Shelf can continue to provide considerable economic
benefits to the UK through increased energy security and further development of the
UK’s strong and export-focussed supply chain, as well as the jobs which the industry
both provides and supports.</p><p> </p><p> </p><p> </p><p>We understand the challenges
currently facing the UK oil and gas industry following the steep fall in oil prices
and are following developments in the North Sea closely.</p><p> </p><p> </p><p> </p><p>We
have been proactive in our response to the weakening oil price. In December, the government
announced an ambitious programme of reform across the oil and gas tax regime, including
the introduction of a new single investment allowance to support investment on the
UKCS and an immediate cut to the rate of the Supplementary Charge, which is already
in effect.</p><p> </p><p> </p><p> </p><p>The Investment Allowance was identified by
the industry as their number one priority and would incentivise drilling work, a formal
consultation on this measure is underway.</p><p> </p><p> </p><p> </p><p>Although these
fiscal measures will encourage activity and protect jobs, our response has not been
limited to the use of the tax system. The Secretary of State for Energy and Climate
Change, the Rt Hon Edward Davey MP, has tasked Andy Samuel, the CEO of the newly formed
OGA, to lead an urgent commission, working with industry to identify what further
measures might be taken by the government and industry. The report outlining the conclusions
of this work shall be presented by the end of February.</p><p> </p><p> </p><p> </p><p>Additionally,
the BIS led joint oil and gas Industrial Strategy outlines key considerations regarding
training and maintaining talent within the industry, to sustain and promote growth
within the supply chain.</p><p> </p>
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