Cambo Oilfield Owner Reveals He Does Not Need To Pay Tax On Controversial Project “For Many Years” Due To “Attractive” UK Rules | Climate News

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The main owner of the controversial Cambo oil field stressed in a company presentation that he was not required to pay tax for “many years” on his North Sea projects because of the “attractive” tax regime. UK.

The British company Siccar Point Energy is co-owner of Cambo with Shell. The field is said to contain up to 800 million barrels of oil.

The government must grant a definitive permit to start drilling there, sparking a nationwide campaign by environmentalists to stop further extraction of fossil fuels, as recommended by both the UN and the International Energy Agency.

Picture:
Oil-splattered statue of Prime Minister Boris Johnson as activists protest against Cambo oil field

In the company presentation, dated February 2021 and available to the public, Siccar Point states that due to the “UK’s simplified and attractive tax regime … Siccar Point … should not pay taxes for many years to come. “.

As Prime Minister Boris Johnson prepares to return to COP26 to urge nations to be more ambitious, and as countries like Costa Rica and Denmark launch the Beyond Oil and Gas Alliance, Siccar Point’s presentation underscores just how much the UK is considered a favorable place for fossil fuel companies to do business.

Energy research firm Rystad Energy recently named the UK as the country that offers oil and gas companies the “best profit conditions” in the world “to develop large offshore fields”.

A Siccar Point Energy spokesperson told Sky News: “Siccar Point Energy is a UK company, with assets based entirely in the UK.

“It is subject to full UK tax and taxes will be paid as they fall due. Cambo is a multibillion pound investment that will reduce UK dependence on imported energy during the managed transition to net zero and will create thousands of jobs in the UK.

“The project will not generate income and profits for a number of years, but when it does, those profits will fall fully within the scope of UK taxation.”

Siccar Point is not alone.

Sky News has previously reported that some of the world’s largest oil companies are currently paying negative taxes on their North Sea fossil fuel extraction and production operations.

Official data released by the Extractive Industries Transparency Initiative, backed by the UK government, shows that in fiscal year 2019-2020, ExxonMobil received a total of £ 117million from HMRC, Shell received £ 110million and BP received £ 39million.

In fact, a third of all major energy companies operating in the North Sea paid negative tax last year.

This is possible in large part thanks to a British tax policy that was put in place just months after the Paris climate agreement in 2015, allowing oil and gas companies to recover public funds to help with the dismantling platforms and infrastructure like the UK are making progress towards their net zero carbon emissions targets.

It is also possible because companies are allowed to acquire the tax history – and the associated benefits and depreciation – of oil and gas fields when they purchase them, and benefit from large deductions for capital expenditures on investments. New projects.

Campaign groups claim current tax policies are in fact tantamount to the British public subsidizing fossil fuel extraction, even as they are urged to make greener choices in their own lives.

Environmental lawyer and director of campaign group Uplift, Tessa Khan, told Sky News: “The UK government has set the rules for the North Sea to make it the most profitable country in the world for companies seeking to develop large offshore oil and gas projects. , like Cambo.

“And that means, as a country, that we are subsidizing billions of dollars to the very companies that are causing the climate crisis.

“There cannot be new oil and gas developments if we want a livable climate. How can Boris Johnson stand in front of world leaders and demand that they change as he procrastinates on Cambo and the other 30 North Sea oil and gas projects pending approval?

“His government must step up its efforts and join those countries that are phasing out fossil fuel production.”

The UK government has insisted it is not allowed to intervene in licensing and permitting, which is run by a regulatory body called the Oil and Gas Authority.

Spokesmen cite advice from the Independent Committee on Climate Change, which recognizes that fossil fuels will continue to be part of the UK’s energy mix over the next decade, and the fact that all new extractions planned in the North Sea have been taken into account in the network. zero carbon strategy.

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