Chancellor faces plea to boost North Sea support

The Chancellor must use this month's Autumn Statement to boost investor confidence in the North Sea and encourage new entrants, industry bosses stressed today.

OIl & Gas UK urged Chancellor Philip Hammond to 'get behind' the embattled sector. Picture: Andrew Milligan/PA Wire

Trade body Oil & Gas UK has written to Philip Hammond asking him to use his 23 November address to “get behind” a sector that has been battered by the slump in the oil price, leading to thousands of job cuts and abandoned investment.

The organisation’s recently published economic report found that funding in the UK Continental Shelf had fallen to £9 billion this year, from a record high of almost £15bn in 2014, highlighting the difficulty for investors in accessing finance for asset development.

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Deirdre Michie, chief executive of Oil & Gas UK, said: “Sentiment and stability are important, and the Chancellor has a real opportunity to use the Autumn Statement to send a clear message to investors that the UK Continental Shelf is a great place to do business.

“Exploration and development drilling has fallen to record lows and industry figures reveal a drought of new investment approved in 2016, and 2017 looks no better.

“The UK oil and gas industry is much more globally competitive than it was two years ago. The cost of doing business in the North Sea has come down significantly and production has increased for the first time in 15 years.

“We urgently need to see new entrants encouraged into the market and increased asset trading is one area that could boost activity in the North Sea by facilitating the trading of late-life assets.”