§ Mr. Alan SimpsonTo ask the Chancellor of the Exchequer if he will make a statement on tax relief levels relating to oil and gas rig decommissioning; and what estimate he has made of the likely tax disbursements in respect of such decommissioning over the next 30 years. [24785]
§ Dawn PrimaroloQualifying costs of decommissioning oil and gas installations are allowable for Petroleum Revenue Tax (PRT) purposes. They also attract a special 100 per cent. capital allowance for Corporation Tax (CT) purposes. The level of tax relief available for decommissioning the installations of a field therefore depends on the extent to which the field has paid PRT and the companies which own it pay CT.
The Department of Trade and Industry currently estimates that the total costs of decommissioning existing offshore installations over the next 25 years could be in the region of £7 billion to £10 billion at today's prices. On average, about half those costs are expected to be met from the Exchequer by way of tax relief.