The British government is to create a new job of ‘North Sea Oil Ambassador’ to help the industry open up new global markets.
That was the sole new initiative announced today by the UK government’s Deputy Scotland Office minister at the industry’s annual conference in Aberdeen – but he provided no details about timescales, nor where the new ambassador would be based or operate.
Lord Andrew Dunlop used his speech – which largely covered the same ground as British Energy Minister Amber Rudd the previous day – to summarise other recent and ongoing UK government actions to help the North Sea oil and gas industry tackle the jobs crisis and investment slump following the plunge in crude oil prices since June 2014.
Dunlop said: “The UK Continental Shelf is open for business and remains a hugely important asset for this country. With potentially up to 20 billion barrels remaining we will still be producing oil for decades to come.
“However as the oil becomes more difficult and costly to extract new approaches are required.
“I’ve seen first-hand on my visits to companies here in the North East – Enquest, Bibby, Chevron and many more – the creative thinking that is being applied to improve the economics of operating in the North Sea.
“As a Government we know that there is much we can do to support additional extraction. It’s why we accepted the wise advice of Sir Ian Wood and created the Oil and Gas Authority. And it’s why we moved quickly to legislate last year to make sure that this organisation has the powers it needs to maximise the potential of the UK Continental Shelf’s resources, working in partnership with industry.
“The Energy Act became law in May, formally establishing the OGA as an independent regulator with powers to gather the information it needs and the teeth where necessary to impose sanctions.
“Everything I’ve seen and heard suggests that the OGA has hit the ground running and quickly established the respect and confidence of the industry
“But for this strategy to work in the long run there must be financial incentives for operators to take on the challenges of acquiring increasingly hard-to-reach assets in the short run.”
He said the Treasury made a ‘loss’ last year from the North Sea as ‘net revenues to the UK Government from the oil and gas sector fell to minus £24 million”.
And he made the standard ‘keeping tax policy under review’ statement; “I know that constructive discussions are continuing between the UK Government and industry, including through the fiscal forum, to make sure the existing tax regime is fit for purpose.”
But see also:
EXCLUSIVE: Osborne discusses new rises in UK income tax and VAT as Scottish Tories call on Treasury to provide loan guarantees to boost N. Sea investment
The government is taking both a longer-term and global approach to helping the domestic oil and gas industry, he added.
Dunlop said: “Our focus though is not just about supporting offshore operations here and now.
“It’s also about supporting the oil and gas supply chain that has grown up to service the North Sea but for whom a sustainable, long-term future will increasingly mean exporting to new overseas markets the expertise forged here in the North Sea.
“This supply chain now accounts for a significant proportion of the UK economy with turnover at an estimated £30 to £40 billion and exports of £16 billion.
“To put these numbers into perspective, the automobile industry contributes around £15 billion to the UK economy. Marine and subsea alone are worth roughly £20 billion worldwide and the UK accounts for almost half of that, making this a sector in which we are undoubtedly world leaders.
“And to emphasise the importance of oil and gas we will soon be announcing an ambassador for the sector who will have the specific remit of helping to open overseas markets for UK businesses.”