Corporation tax general: overview of the main types of costs incurred in oil exploration and production - decommissioning and abandonment
During the life of a field the operator may decommission redundant installations and equipment. As the field life draws to a close there will ultimately be abandonment expenditure, this was confirmed as capital by the RTZ case (see OT20203). Relief is available through the capital allowances system subject to stringent conditions for both general decommissioning and for abandonment expenditure. For further information on decommissioning and abandonment generally see the section commencing at OT28000.