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Montevideo, May 24th 2017 - 23:36 UTC

Falklands denies any commitment to reduce oil royalty has been entered

Tuesday, March 14th 2017 - 06:26 UTC
Full article 11 comments
Luxton said “FIG does not intend to embark on negotiating fiscal policy through the media” and confirmed no commitment to reduce royalty had been entered Luxton said “FIG does not intend to embark on negotiating fiscal policy through the media” and confirmed no commitment to reduce royalty had been entered
The statement was in response to an article published in The Times saying Premier was asking for a tax break to develop Sea Lion The statement was in response to an article published in The Times saying Premier was asking for a tax break to develop Sea Lion

The Falkland Islands government announced on Monday that it is currently in discussion with Premier Oil on a wide range of issues with the objective of progressing the Sea Lion development towards a successful project sanction.

 The official release was in response to an article published in The Times on 13 March with the heading: “Premier Oil asks Falklands for tax break to develop field” in which the company “is struggling to make the project commercially viable because of low crude prices”.

FIG denies such a situation and recalls that Falklands' offshore licensing regulations clearly contemplate oil market fluctuations, and thus royalties, and that FIG does not intend to embark on negotiating fiscal policy through the media.

In effect, “as identified in the article, the option to reduce royalty is contained within the current Offshore Petroleum Licensing Regulations. This is not a new provision, and it has existed since the regulations were first introduced in 1995.

”Royalty payments are levied at a standard rate of 9%, currently approximately US$4.64 per barrel at the prevailing oil price, and vary according to oil price fluctuations.

Stephen Luxton, Director of Mineral Resources, said: “FIG does not intend to embark on negotiating fiscal policy through the media, but to contain speculation, I can confirm that no commitment to reduce royalty has been entered into by FIG.

The purpose of the royalty-based regime is to deliver an early benefit from oil development to the economy and the people of the Falkland Islands. Offshore oil resources belong to the people of the Falkland Islands and as you would expect, whilst unlikely, if any variation is subsequently proposed from the prescribed level then it would be subject to a formal decision by Executive Council”

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  • golfcronie

    Think/Voice you keep dodging the question, “ What can the Argentine government bring to the negociating table that the FALKLANDERS would even contemplate ” Your silence is typical as Argentina itself has not even thought about it.

    Mar 14th, 2017 - 03:02 pm +1
  • darragh

    Golfcronie

    I've often asked the same question on this and other sites and am invariably presented with a stony silence - except for one twonk who said that Argentina might be prepared to allow the UK to retain sovereignty over South Georgia.

    The reality is of course, as everybody well knows, that Argentina just expects the FI to be handed over but they don't have the balls to admit it....

    Mar 14th, 2017 - 11:14 pm +1
  • Jo Bloggs

    Golfcronie/ darragh

    They can offer us nothing that could make life better for us now apart from leaving us alone. That's why they constantly try to put pressure on their neighbours to impede our development; the idea being that if we were under their control those things wouldn't happen to us. They have no plan for what life in the Falklands would be like if they were ever granted (they could never take it) sovereignty. That would be like having a plan for if God appeared on earth one day. Pointless.

    Mar 14th, 2017 - 11:58 pm +1
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