UK Inquiry Tracker

Public cost of decommissioning oil and gas infrastructure inquiry

Public Accounts Committee Closed Inquiry

Opened: 15 Nov 2018 Closed: 15 Nov 2018 Parliament page

Scope of the inquiry There are currently more than 300 fixed installations, such as oil platforms, in production in the UK, primarily in the North Sea. Since the early 1970s, oil and gas operators in the UK have recovered more than 44 billion barrels of oil and gas, generating £334 … Read more Scope of the inquiry There are currently more than 300 fixed installations, such as oil platforms, in production in the UK, primarily in the North Sea. Since the early 1970s, oil and gas operators in the UK have recovered more than 44 billion barrels of oil and gas, generating £334 billion of net tax revenues for the government. But reserves are running out, with the remaining oil and gas becoming harder to find and extract. The Government has an objective to maximise the potential economic value of the UK’s remaining oil and gas reserves. Oil and gas operators in the UK are increasingly decommissioning their assets as they reach the end of their useful economic lives and so expenditure on decommissioning is rising. Operators have spent more than £1 billion on decommissioning in each year since 2014. The Oil and Gas Authority (OGA), the sector’s regulator, estimates that decommissioning the UK's oil and gas assets will cost operators between £45 billion and £77 billion out to the 2060s. A recent National Audit Office (NAO) report has found that the actual cost to taxpayers of decommissioning is uncertain. This is because it will depend on how much decommissioning ultimately costs operators as well as future economic conditions, such as oil prices and exchange rates, which determine profits. The NAO report also found there were gaps in HM Treasury and HMRC’s understanding of the costs and benefits of recent changes to oil and gas tax rules. The Committee also recently concluded in its ‘HMRC’s performance in 2017–18’ report that the Government did not know whether a large number of tax reliefs delivered value for money. Members will use this hearing to challenge the Department for Business, Energy and Industrial Strategy (BEIS) and the Oil and Gas Authority on how they will ensure decommissioning costs for taxpayers are minimised and potential export opportunities are exploited. Moreover, Members will ask the Government to commit to be more transparent about the potential costs of decommissioning to taxpayers. Members may also wish to challenge the Government to improve its understanding of the costs and benefits of its actions in relation to the oil and gas sector. The Committee may also want to follow up with BEIS on its previous reports including on Renewable Heat Incentive (RHI), new nuclear projects and the impact of Government policies on consumer bills. Show less

1 Report

1 Oral session

4 Letters

1 Event

Activity timeline 7 events

17 Oct
2019

Correspondence

Letter from Alex Chisolm to Meg Hillier MP in relation to hydraulic fracturing - dated 6 September 2019

10 Sep
2019

Correspondence

Letter from Dr Andy Samuel to Chair, in relation to the Committee's report on Public cost of decommissioning oil and gas infrastructure - d…

26 Jun
2019

Correspondence

Letter from Alex Chisholm to Chair in response to the Committee's report on Public cost of oil and gas decommissioning, in particular to de…

27 Mar
2019

Report published

89th Report - Public cost of decommissioning oil and gas infrastruture

6 Mar
2019

Correspondence

Letter from Alex Chisolm, Department for Business, Energy and Industrial Strategy to Meg Hillier MP on Public cost of decommissioning oil a…

11 Feb
2019

Oral evidence

Oral evidence session

11 Feb
2019

Formal meeting (oral evidence session) · Room 8, Palace of Westminster

Committee event

Oral evidence sessions 1 session

11 Feb 2019

View on parliament.uk

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
89th Report - Public cost of decommissioning oil and gas infrast…	HC 1742	27 Mar 2019	0

Correspondence 4 letters

17 Oct 2019 To committee Letter from Alex Chisolm to Meg Hillier MP in relation to hydraulic fracturing - dated 6 September 2019

Parliament page

10 Sep 2019 To committee Letter from Dr Andy Samuel to Chair, in relation to the Committee's report on Public cost of decommissioning oil and gas infrastructure - dated 10 September 2019

Parliament page

26 Jun 2019 To committee Letter from Alex Chisholm to Chair in response to the Committee's report on Public cost of oil and gas decommissioning, in particular to decommissioning arrangements - dated 21 May 2019

Parliament page

6 Mar 2019 To committee Letter from Alex Chisolm, Department for Business, Energy and Industrial Strategy to Meg Hillier MP on Public cost of decommissioning oil and gas follow-up – 25.02.2019

Parliament page