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Allgemein

What Is A Decommissioning Security Agreement

A bilateral DSA is usually introduced when a company sells its stake in a developed field and there is no field-wide DSA. This provides the outgoing company with a direct security relationship to its previous interest, but no other interest of the licensee. Bilateral ADS often ends automatically when a field-wide AD is set up. This provides guidance on the purpose, scope, intent and application of the DRD. Comments on the most important aspects of the DRD can be cross-checked with the relevant clauses. A copy of the DRD and instructions for applying for a DRD can be found on the UK Government`s website at www.gov.uk/government/consultations/decommissioning-relief-deeds-increasing-tax-certainty-for-oil-and-gas-investment-in-the-uk-continental-shelf. Despite this, the question remains whether a buyer, whether it assumes responsibility for dismantling, the question of a buyer`s ability to have access to tax relief for dismantling expenses if it does not have a tax history in the UKCS. Although for SRI purposes, relief from decommissioning costs may be recovered and covered on the REE debts of former participants, for corporate tax purposes of closing and additional costs, losses resulting from decommissioning costs can only be offset by profits from the closing of the closing of the loss-causing business. On March 20, 2017, Her Majesty`s Treasury released a discussion paper seeking comments on possible changes in the tax treatment of the sale of assets at the end of life, including to allow for the transfer of tax history from a seller to a buyer to address this issue. The inclusion of such changes had already been marked in the 2016 budget.

The discussion paper illustrates the government`s desire to support M&A activities in the UKCS with regard to end-of-life assets in the interest of the MER, but it is also clear that the government has not yet decided what changes, if any, should be made. Comments on the document must be submitted by June 30, 2017, and all proposed changes are expected to be announced in the fall budget. The approach of sharing decommissioning liabilities between sellers and buyers in recent mergers and acquisitions transactions on the British Continental Shelf (UKCS) and possible future changes to the rules regarding the granting of tax relief for decommissioning expenses may unlock further M&A activity on the UKCS. We explore how this can happen and can support the main objective of maximising economic recovery through the UKCS (MER). .

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