Calls for action to help struggling North Sea oil and gas industry

Economy secretary says UK Budget a missed opportunity. Picture: Andrew Cowan

Keith Brown said measures to help the struggling industry in the March Budget, while welcome, were not being taken forward fast enough.

He told the third annual Oil and Gas UK conference in Aberdeen the Budget had been a “missed opportunity” in not addressing the “critical challenge” of increasing low rates of exploration.

He said: “From our point of view, the UK Government cannot consider the last Budget, welcome though some of the measures in that Budget are, as a job done. Further fiscal support for exploration is needed and it is needed now.

“I think the one thing more than anything else, from talking to people in the industry and to colleagues in government, is that the pace, the urgency, of what is required has not been taken forward by that Budget and real urgency is required.”

Mr Brown said there was a lack of urgency in addressing problems, such as access to finance faced by some.

Deirdre Michie, Oil and Gas UK chief executive, also issued a “call to action” on short-term stimulation for exploration.

She said: “Maximising economic recovery means we need to recover more of what we have already found as well as finding more, so we do need to kick-start activity in these vital areas to keep the hopper replenished and future production flowing.

“Stimulating activity is also key to providing some immediate relief and support to the supply chain.

“If we don’t do something urgently then the current hiatus in exploration and appraisal will become the norm – with the basin focusing mainly on production and decommissioning, our world-class supply chain can disperse and relocate as business take their focus elsewhere.”

In a video address to the conference, Damian Hinds, Exchequer Secretary to the Treasury, said the £1 billion for the industry in the Budget had ensured a “truly globally competitive tax regime”.

He added: “I know of no other government in the world that has responded in such a way, on such a scale, to such a degree, to the challenge that comes from these very low oil prices that we have seen.

“I think and hope it sends a very clear signal to the world that the UK continental shelf is open for business.”