The Government’s decision not to change the UK’s oil and gas tax regime has been welcomed by the offshore industry but it will not revive the £600m Clair project west of the Shetlands this year.
The operator and its partners put 2,000 jobs in jeopardy when they stopped all external work in June, citing uncertainty over the tax regime as a factor.
The partners have agreed to fund an internal BP programme on the project to reduce the capital cost. Contractors for the work are unlikely to be reappointed before 1999.
The UK Offshore Operators Association added that the tax descison means the latest offshore licensing round can now proceed ‘with greater certainty’.