“Thanks for the £125m, Dave – but we still need more tax breaks,” oil and gas chief tells prime minister

While welcoming the further measures to boost the UK oil and gas industry announced by the Prime Minister, the head of Oil and Gas UK last night said the industry still needed more.

Deirdre Michie (pictured, left) said: “While the package announced today is very welcome, more still will need to be done to ensure the UKCS becomes the most attractive, mature oil and gas province in the world to do business in. 

“Industry must continue to reduce its costs and improve efficiency but this alone will not be enough. 

“Fiscal as well as regulatory reform have a key role to play in the transformation of the North Sea into a highly competitive, low tax, high-activity basin attractive to a variety of operators and supporting a global supply chain. 

“The 2016 Budget needs to deliver an effective package of measure to help extend late life operations and asset trading, promote exploration and boost investment.

“In line with HM Treasury’s own strategy of continued fiscal reform, steps should also be taken in the Budget to deliver a further permanent cut in the headline tax rate.

“Price downturns have been experienced before but the UK oil and gas industry’s advancing maturity makes this one particularly difficult to weather and emerge from in robust shape.  Measures to boost the health of exploration and investment alongside the supply chain and its widespread employment are therefore very welcome.”

Meanwhile, a new Ministerial group on Oil and Gas, chaired by Amber Rudd, has been set up to reiterate the UK Government’s commitment to supporting the oil and gas industry and those who work in it. Andy Samuel, Chief Executive of OGA, is a member of this new Ministerial group.

The group will coordinate the UK’s response to the oil price and focus on vital issues such as exports, skills and investment. The Group met for the first time on Wednesday (27 January) when it agreed to produce a UK Oil and Gas Workforce Plan in the spring.

This will focus on what steps the Government will take to support those who may lose their jobs in the oil and gas sector, and set out how Government and industry can help these skilled workers move into other sectors, including other energy related infrastructure projects.

It is not known if this will overlap with the work of the Scottish Government-led energy jobs task force, set up last year following a spate of redundancy announcements by companies operating in the North Sea.

• Nicola Sturgeon, Scotland’s First Minister, is also due to visit Europe’s oil capital on Monday. While she has no control over UK taxation or North Sea fiscal policy, she is likely to make more aid announcements for the area.