Malcolm Webb, Oil & Gas UK’s chief executive, responded to the Scottish Government’s announcement regarding the UK oil and gas tax regime, saying:

“Sharply falling oil prices are now adding to the significant challenges the UK offshore oil and gas industry was already facing. The current tax regime is one such challenge and a key factor for companies making decisions on investment and activity. All helpful insights on that issue are welcome, so we will certainly respond to the Scottish Government’s request for views and information.

“We would hope this exercise will complement the crucial work already well underway between the UK Treasury and the industry to make urgent changes to the UKCS tax regime in order to both sustain and encourage further investment. If the Treasury’s new Investment Allowance is to have any impact it must be implemented by Budget 2015 at the very latest. However, with the oil price now at around $50 per barrel, it is becoming increasingly apparent that this measure is not enough and a significant reduction in the headline rate is required.

“We are encouraged to see a growing political and industry consensus around the now pressing need for yet more fundamental and urgent changes to the tax regime. Oil & Gas UK is committed to playing a fully engaged and constructive part in this important process of reform and looks forward to working with both the UK and Scottish governments and all other stakeholders to that end.”