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page 6

However, it is absolutely crucial that in support of the basin in the immediate as well as the longer term, the tax regime

be adjusted as follows: a significant permanent reduction in headline tax rates for old and new assets alike across the

UKCS is required, a move which would be consistent with HM Treasury’s ‘Driving Investment’ plan for fiscal reform and

would send the signal to investors that the government has confidence in the long-term future of this industry in the UK.

This should be combined with additional measures to help unlock the late-life asset market and encourage exploration

by permanently removing the special taxes from all discoveries made over the next five years. Finally, improving the

effectiveness of the Investment Allowance would stimulate activity in the short term and attract fresh investment.

We are an industry at the edge of a chasm. This report can provide the insights to help bridge to an enduring future.

I hope you find it informative and useful.

Deirdre Michie

Chief Executive, Oil & Gas UK