Queen’s Speech: Oil industry to pay for new regulator? (UK)
The UK government’s legislative programme outlined in today’s Queen’s Speech included a section on the Wood Report, which says that the new Regulator to oversee the UK’s offshore operations should be fully funded by the industry.
The government said it would introduce a levy, making power so that the costs of funding a larger, better resourced regulator can be paid for by industry rather than by the taxpayer as is currently the case.
“Clauses will be introduced later in the session to set up a new super agency for the North Sea, with a duty to support the government and industry in maximising economic recovery from this important resource,” the programme reads.
Oil&Gas UK disagrees
Oil & Gas UK, a body representing UK offshore oil & gas companies, in response said that while it strongly supported the Wood Report guidelines as a correct prescription to help maximise economic recovery from the UK Continental Shelf, it did not agree that the whole cost of the new Regulator should be borne by industry.
Commenting on this, Oil & Gas UK CEO Malcolm Webb said: “We must disagree with the government seeking to absolve itself from all financial involvement or responsibility for the new Regulator.”
“This is not a question of the size of the bill. Production taxes paid by this industry each year run into many billions of pounds and the total cost of the new Regulator will be a very tiny fraction of that. It is rather a question of good governance, transparency and fairness that at least a part of the cost of the Regulator should continue to be borne by the Department of Energy.”
“We look forward to hearing further progress soon on the formation of the Regulator.”