Ayming US, the international business performance consultancy, shares insights that R&D tax credits are key to oilfield services’ transformation in the midst of the energy transition.
The company’s most recent report, “The Benchmark” which compares global R&D tax incentives, highlights the US’s qualification generosity and ease of application as providing an extremely optimistic environment for oilfield service companies to accelerate innovation during the energy transition.
“It’s a perfect storm. We know from speaking with many players in the sector that awareness around what constitutes tax relief is not well understood. So there’s a clear opportunity for oil and gas companies to accelerate their move towards more sustainable operations in Houston and globally,” says Hervé Amar, President of Ayming.
The Benchmark uses two clear metrics: generosity of the scheme and ease of application. It highlights that the US scheme offers one of the broadest definitions of qualified activities globally, and that companies can retrospectively claim for up to 3 years’ worth of work.
With the oil and gas sector facing ever changing market demands, R&D tax credits can be a powerful tool to mitigate risk and relieve pressure on companies. Many lesser known activities can fall under the relief including flow assurance simulations, customisation of products to client needs and installation engineering. Product development also needs to be seen as evolution, not revolution – even minor updates can qualify.
“There’s a real opportunity here for US players to be on the front foot. No two R&D tax regimes are exactly alike, and there is a multitude of legislation, interpretation and policy. What’s vital for energy companies will be understanding the activities that qualify but also assessing international R&D incentives to maximise the credit potential across their global organisation,” adds Amar.