New Scottish Economy and Energy Ministers meet UK oil chiefs today over ‘lower for longer’ N. Sea slump

oil 50 barrelThe newly-appointed Scottish industry and energy ministers – respectively Keith Brown and Paul Wheelhouse – are due to meet key figures in the oil and gas industry in Aberdeen today to learn how the industry continues to adapt to the sustained period of low prices.

The ministerial duo are due to meet leading oil and gas companies Nexen’s Managing Director Ray Riddoch, Enquest, trade unions, industry body Oil and Gas UK and regulator the Oil and Gas Authority.

Brown will discuss how the Scottish Government’s “clear and unrelenting focus’ on creating a competitive and supportive business environment can help the industry deal with its current challenges.

He will also raise the UK Government’s commitment – made in its March Budget – to use the UK Guarantees Scheme for oil and gas infrastructure where it could help secure new investment in assets of strategic importance.

Brown said last night: “In the Budget, the UK Government committed to consider proposals for using the UK Guarantees Scheme for oil and gas infrastructure where it could help secure new investment in assets of strategic importance.

“We are yet to see the progress that is crucial in this area. Sustaining critical infrastructure in the North Sea is a key priority and the UK Government must act quickly and decisively to deliver this commitment.

“The Scottish Government strongly believes that the North Sea oil and gas sector can have a bright future for years to come. Given the considerable challenges faced by industry, this will require a concerted effort by all stakeholders

“The oil and gas industry is an important part of the Scottish economy and the downturn has had a significant impact on the industry and its workforce. Today’s visit, so soon after having been appointed in my new role, demonstrates that both Paul Wheelhouse and I will continue to engage closely with the industry, trade union and regulator to overcome the current challenges and secure a long term future for the sector.”

Nexen is an upstream oil and gas company developing energy resources in the UK North Sea, offshore West Africa, the United States and Western Canada. It is currently one of the biggest oil producers in the North Sea.

While the price of benchmark Brent crude oil has recovered to around $50-barrel this spring since barely half that in December 2015, this is still less way below the peak of more than $110-barrel in June 2014.

Many oil analyst see no big upswing in crude oil prices unless and until the Saudi-dominated OPEC producers’ cartel agrees to freeze or reduce output.

And Saudi Arabia will not agree to any freeze or reduction in oil production which does not also involved Iran doing the same – an agreement which has hitherto been unobtainable due to regional religious rivalries.

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