Tuesday, 27 September 2016 14:47

OIL AND GAS report piles pressure on UK Government

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Oil and Gas UK’s Economic Report 2016 has exposed serious failings by the UK government in taking much needed action to bolster the North Sea oil and gas industry at a time of sustained low oil prices across the globe.

The SNP welcomed the report’s findings that the industry has made substantial progress in reducing costs and improving efficiency. North Sea production has also shown encouraging growth – with operators well placed to capitalise when the upturn in prices comes.

However, observations on a decline in exploration prove the need for decisive action on incentives from the UK government, which have long been called for by the SNP.

Last week First Minister Nicola Sturgeon opened Statoil’s new Aberdeen headquarters, confirming that 600 applications have now been processed for the £12 million Transition Training Fund – to help retain industry skills within the workplace. The Scottish Government has already invested £7 million, unlocking £16 million in new innovation projects. The First Minister has reiterated that the SNP Government will continue to do all it can within its powers to support jobs and businesses in the sector – however powers over tax incentives and other means of stimulus remain controlled by Westminster.  

Commenting on OGUK’s Economic Report 2016, the SNP’s Energy Spokesperson Callum McCaig MP said:

“Oil and Gas UK’s latest economic report lays down a serious challenge to the UK government.

“The industry has worked hard towards lowering costs and continued collaboration will only help to improve the picture. Production rates are healthy too, but with global oil price remaining suppressed these measures do not go far enough.

“In the SNP we have long called for serious, sensible measures which will make a real difference in incentivising exploration and development of new prospects in the North Sea. With these latest figures showing record low activity in exploration, the time for action from the UK government to boost activity and protect jobs is long overdue.

“Yesterday the Prime Minister did herself no favours by sneering from afar on the challenges that low oil prices represent for Scotland. Those workers who’ve lost their jobs want to see the UK government actually do something about it – they don’t want political goading and condescension from Theresa May.

“At the beginning of 2016 the SNP called for this to be a ‘year of action’ from the Tory government on Scotland’s oil and gas industry. We even made it easy for them – setting out tax incentives and loan guarantee proposals which could have stimulated investment, sustained jobs and maximised recovery of reserves over the long term.  

“Let’s bear in mind the North Sea oil and gas sector has generated £300 billion for the Treasury and has now been abandoned by the Tories in its time of need.

“If Theresa May’s government doesn’t now focus on vital support for the sector, to see through the worst of the downturn and encouraging future growth, then they will be guilty of perpetrating one of the most shameful betrayals in the history of Scottish industry.”