Commenting on the alarming Oil and Gas UK 2015 Activity Report, ** John Hutchinson, Managing Partner at Epi-V, said: “The future of North Sea oil is at risk. We need a reduction in taxes and a simplification in the North Sea tax regime.
** See also Scottish Energy News previous report: N. Sea revenues dive to lowest on record since 1988 as investment teeters on verge of collapse amid economic carnage of crude oil price plunge: http://goo.gl/zib2P9 **
“Lord Browne is only the latest in a growing number of senior figures to speak out and the calls for action are becoming so loud the Government can’t ignore them.
“The Government has to address the toxic combination of ageing fields, rising production costs and reduced oil price environment that is having such a damaging impact on the North Sea oil and gas industry.
“And it can do that quickly and simply through reducing tax.”
Epi-V is a private equity fund specialising in investment in oil and gas services, providing capital, industry insight and commercialisation competence to technology-driven companies targeting growth markets in the global upstream sector.
Responding to the 2015 Activity Report published by UK Oil and Gas,** Chancellor George Osborne vowed to take further action to support the North Sea oil and gas industry.
He said: “While the huge fall in the oil price has been a real benefit to the British economy, it’s been a challenge for the North Sea oil and gas industry. We’ve got record investment in the North Sea and there’s a lot of oil still in there.
“We want to continue to maximise investment in the North Sea to make sure it continues to provide jobs and economic benefits to the whole of the UK.
“The North Sea is a great national asset and we will do everything to protect it. I’ve already cut taxes in the North Sea and we’re now looking at what more we can do to work with industry to support investment in this important sector.”
Osborne is due to meet industry leaders today (Weds) to discuss what action is needed by both industry and government to ensure the long term success of the sector.
Meanwhile, Scotland’s Energy Minister Fergus Ewing commented: “This report highlights the long overdue and urgent action on taxation and regulation, which the UK government must deliver to give the industry the certainty it needs to protect jobs and investment.
“It is encouraging that Oil and Gas UK expect the first annual production increase in 15 years to happen this year.
“However, to sustain North Sea activity over the longer term, exploration levels must improve and long-term investment must be sustained to ensure that sufficient new production comes on stream. This should help to protect future tax receipts and ensure a fair return to the nation.”
The union Unite called for immediate government intervention to halt what it claimed was a “potentially disastrous race to the bottom” in working standards across the North Sea offshore industry.
Pat Rafferty, Unite’s Scottish Secretary, said: “We can see clearly the industry’s intention to redraw the offshore landscape for the next generation and it bodes poorly for jobs, pay, skills and a safe working environment.”