ABERDEEN, Scotland, April 14, 2011 /PRNewswire/ -- Professor Alex Kemp joins Oil and Gas IQ ahead of the Mature Fields Conference 2011 to discuss the economics of later field life and the challenge of maximising production and extending lifecycle.
In the Budget on 23rd March, the Chancellor announced increases on the taxation of North Sea oil on Mature Fields subject to petroleum revenue tax from 75% to 81%. In a recent podcast interview with Oil and Gas IQ, Professor Alex Kemp discusses this delicate topic and gives an outlook on how this development will affect mature field operators.
"It will reduce the cash flows, will reduce returns on all investments and the economics of incremental investments in Mature Fields will certainly all be reassessed again. On a more technical point, the Budget reduced the rate of relief for decommissioning costs. So there're a number of unfortunate changes there from the point of view of enhancing investments in incremental projects."
Alex Kemp fears the effects of the tax increase on mature fields operators. "The question is, really, will the downward trend on the Mature Fields be rather faster than it was before the Budget. My fear is that this will happen. The Government have indicated that they're happy to consider requests for further allowances. I think they were primarily thinking of brand new fields, but certainly they have in the past been willing to consider reliefs for Mature Fields, especially those subject to petroleum revenue tax and, therefore, a very high tax rate."
In addition to his podcast interview, Alex Kemp will also be speaking at the Mature Fields 2011 event, taking place 28th to 29th June 2011 in Aberdeen. He will deliver a session on the Economics of Later Field Life, discussing topics such as Incremental investments for PRT and non-PRT (Petroleum Revenue Tax) paying fields, Identifying the possible incentives for implementing EOR and Assessing the economics of CO2 EOR.
For more information about speakers and the agenda or to listen to the full podcast interview, please visit: http://bit.ly/ecxYYZ
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SOURCE Oil and Gas IQ