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Ministers say North Sea oil better off within UK

Vince Cable will unveil UK energy policy later today. Picture: TSPL

Vince Cable will unveil UK energy policy later today. Picture: TSPL

SCOTLAND’S oil and gas industry would be better positioned to withstand global shocks within the UK than it would if Scotland was an independent country.

• Cross-party group to be set up to work with oil industry

• £7m extreme engineering centre to be opened in Newcastle

Three Liberal Democrat secretaries of state were in Aberdeen to set out their long-term strategy, offering to encourage investment, boost supply chains and promote exports.

They used the opportunity to intervene in the Scottish independence debate, telling business leaders that the UK Government is best able to support them. An independent Scotland would be too reliant on offshore revenue and less able to weather any “shocks”, they said.

Business Secretary Vince Cable, Scottish Secretary Michael Moore and Energy Secretary Ed Davey spoke at the launch.

They want to maximise economic production, noting that oil and gas will make up 70% of British energy needs into the 2040s. The supply chain can also be supported, exporting skills to other countries and bringing new skills to the industry, they said.

A new cross-party group of MPs will start to work with the industry in an attempt to guide the Government’s work.

Meanwhile, it was announced that a £7 million “extreme” engineering centre for subsea and offshore engineering will be set up in Newcastle.

Mr Davey said the industry will play a huge role despite efforts to promote cleaner fuels and decarbonisation.

“The primary products, oil and gas, on all estimations will remain an integral part of the mix for many decades to come,” he told an invited audience which included industry leaders and local politicians.

Referendum

Quickly moving to address the independence referendum, he said: “Only the UK can deliver what is required over a sustained period if you are going to get the most out of the oil and gas industry. The UK is a large economy - that is why we can provide the support. Smaller economies have difficulty absorbing the costs.

“The size of the UK economy can really create the framework and certainty.”

Mr Cable also underlined the pivotal role oil revenues are playing in the debate about the future of the UK.

The industry “shouldn’t feel taken for granted by the UK Government”, he told the industry representatives which included firms such as Shell as well as emerging companies.

“A bigger country is better at absorbing shocks - it’s simple logic. A modest change has a significant impact on GDP - in a country 10 times smaller, the shock would be proportionally bigger. We need to remember that when we’re debating this sensitive issue.”

Mr Cable, while pledging closer involvement from the Government, also promised to “back off” if the industry finds it unhelpful.

Attempting to turn around a Ronald Reagan quote, he said he “really means it” when he says he is from the Government and wants to help.

Mr Cable, who also opened a facility at offshore specialist Expro in Aberdeen, said: “I want us to consider what barriers are stopping British companies bidding for and winning work in the North Sea. This is an expanding industry. We can either help create more jobs and opportunities across the UK if we get this right, or see work going overseas if not.”

Mr Moore said their appearance in Aberdeen, watched by other MPs and civic leaders, was symbolic.

“On a cross-party basis, politicians are here to support your sector. But symbols don’t pay the bills, hard work does,” he said.

Expertise in the oil and gas supply chain needs to harnessed and sent abroad, he told the audience.

SEE ALSO: Brian Wilson: Talk of second oil boom is a bust

 

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