Scottish Energy Minister calls on UK government to do more to support oil and gas industry

Ahead of the publication of Sir Ian Wood’s recommendations for Maximising Economic Recovery in the North Sea, Scottish Energy Minister Fergus Ewing has called on the UK Government to do more to support the oil and gas industry.

Fergus Ewing, MSP, Scottish Energy Minister
Fergus Ewing, MSP, Scottish Energy Minister

The Scottish Government has already made clear to the industry and to the UK Government that it strongly supports the full implementation of Sir Ian’s interim proposals for a stronger, more effective regulatory body, which if implemented quickly can bring enormous progress in the recovery of oil and gas in the North Sea.

Ewing said: “I call on the UK Government to back Sir Ian’s plans by announcing the creation of a new fit for purpose North Sea Regulator based in Aberdeen, without delay.

“Sir Ian’s interim report estimated that the prize from increased and effective co-operation could be an additional three to four billion barrels of oil equivalent over 20 years, which could be worth £200 billion.

“Time is of the essence. In line with industry, we believe that it is essential these recommendations are implemented with speed, and that a shadow body be set up now, rather than await the outcome of primary legislation.

“I share Sir Ian’s view that the industry should finance this body, and since most of the developments in the North Sea and west of Shetland are managed from Aberdeen, that is the only conceivable principal location for the new regulatory body.

“By addressing the challenges facing the oil and gas industry and harnessing the opportunities, enormous benefits can be reaped by the industry and by Scotland.

“The publication of Sir Ian’s final report is expected next week, along with the UK Government’s response, and I look forward to considering these in full.”

The Interim Report made clear that the current UK governance structure of having the regulatory body situated within the Department for Energy and Climate Change, is “no longer adequate to meet the challenges of managing an increasingly complex basin”.

The evidence gathered by Sir Ian showed unanimously that the existing regulator is “significantly under-resourced and under-powered”. A new regulator is therefore needed in order to provide the necessary skills, knowledge and authority to maximise the potential of the North Sea, for the industry and for Scotland.

The Scottish Government welcomes the contribution that Sir Ian Wood’s Review makes to the debate, noting that fiscal instability has been a significant factor in basing underperformance in the North Sea. The Scottish Government appointed an Independent Expert Commission on Oil and Gas in September 2013, chaired by Melfort Campbell, who will report in the Spring.

In addition to the regulatory regime, the Commission will make specific proposals in relation to the North Sea fiscal regime with a view to providing long term stability and predictability for the industry. It will also consider Sir Ian’s recommendations in full.


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