Jumpstart, the tax specialist which has increasingly helped to encourage innovation in UK companies, has urged firms in Scotland to seize the opportunities arising from decommissioning in the North Sea.

Jumpstart renewed its appeal following the announcement last week (Thursday Feb 9, 2017) by Scotland's First Minister Nicola Sturgeon of a new £5 million Decommissioning Challenge Fund aimed at opening up opportunities for firms in the supply chain.

It will support engineering scoping work, infrastructure upgrades and innovation in salvage and transport methods at ports and harbours. It was unveiled on the day Shell published proposals for decommissioning the Brent field.

Ian Donaldson, Jumpstart's Client Engagement Manager in Aberdeen, said: "This new money reinforces what we have been saying - that there is significant potential for innovation and improved efficiencies in the decommissioning market.

"These new efficiencies are very likely to be compliant with the requirements of research and development tax credit legislation and decommissioning companies only need to seek them out."

Mr Donaldson pointed out that more than 5500 wells, 400 facilities and more than 10,000km of pipelines are likely to require decommissioning over the next 35 years. The emphasis will be on environmentally and economically acceptable solutions. 

Areas such as engineering and planning, well plugging and abandonment, demobilisation of derrick barges, and platform removal are likely to be highly eligible for R&D tax credits. 

Mr Donaldson said that the fund announced yesterday was aimed solely at ports looking to cash in on dismantling the topsides of North Sea platforms, but emphasised that the tax credit opportunities applied across the whole of the decommissioning market.

More than £17 billion is expected to be spent on decommissioning on the UK Continental Shelf from 2016 to 2025, according to industry body Oil & Gas UK.

One Scottish company which has already invested heavily in the market is John Lawrie Decom which, with Aberdeen Harbour, has acquired access to a decommissioning-dedicated quayside area to receive structures for dismantling. 

Its environmental director Ray Grant said: "Our activity in this market continues to grow as more assets are being decommissioned."

Brian Williamson, managing director of Jumpstart, said: "It is imperative that companies in, or thinking of entering, this lucrative new market are made aware of and investigate the potential returns that will be available from R&D tax credits." 

Jumpstart has successfully recouped £42 million for Scottish companies since its inception in 2008 as a result of 1318 specifically-tailored applications. It currently has 173 active clients in Scotland alone and more than 500 in the wider UK.

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