Friday 30 September 2016

Scots fear remaining North Sea oil won't be extracted

Karolin Schaps

Published 16/02/2016 | 02:30

Scotland is home to most of Britain’s oil and gas production and the oil market downturn has already led to around 10,000 job losses and salary cuts. Photo: Reuters
Scotland is home to most of Britain’s oil and gas production and the oil market downturn has already led to around 10,000 job losses and salary cuts. Photo: Reuters

Scotland's finance minister has told the British government he is concerned that some of Britain's remaining North Sea oil will never be recovered as companies active in the area have scaled down investments due to the weak oil price.

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John Swinney, who is also Scotland's deputy first minister, urged British finance minister George Osborne in a letter to cut taxes on oil and gas companies and to consider giving loan guarantees to the sector to avoid early field shutdowns and more job losses.

Scotland is home to most of Britain's oil and gas production and the oil market downturn has already led to around 10,000 job losses and salary cuts.

"The declining oil price has resulted in a number of North Sea projects being removed from company investment plans," Mr Swinney wrote in the letter, published by the Scottish government.

"There is a serious risk that these resources will be permanently unrecoverable."

Scotland's First Minister, Nicola Sturgeon, said last month that her government would ask for a meeting with Mr Osborne to urge him to make oil and gas tax cuts in his annual budget announcement scheduled for next month.

A meeting has not yet taken place, a spokesman for the Scottish government said.

More specifically, Mr Swinney asked for a reduction in the headline oil and gas tax rate, more support for exploration, access to decommissioning tax relief and loan guarantees for oil and gas investors.

The head of Britain's oil regulator said last week the country would offer more flexible North Sea oil and gas licenses in its next tender round, in a bid to make exploration work more attractive. (Reuters)

Irish Independent

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