WIREDGOV

DFM: Skilled workforce will underpin successful recovery of oil and gas sector

Wider fiscal and regulatory reform must continue to maximise North Sea prospects and economic recovery Deputy First Minister and Finance Secretary John Swinney said yesterday.

During a visit to the Nigg Skills Academy, the Deputy First Minister took a tour of the site and met apprentices from companies across Scotland.

Despite the new measures, ‘a heavy price has already been paid’ by some of our oil and gas workforce, and the Deputy First Minister believes this is proof the UK Government must deliver wider reform after decades of irresponsible stewardship of Scotland’s £28.7 billion energy sector.

The visit yesterday coincided with the third meeting of the Energy Jobs Taskforce. The taskforce which brings together senior industry figures, trade unions and public sector organisation is working to retain the talent and skills in the sector as well as provide support to people facing redundancy. The Scottish Government believes the North Sea is a fantastic asset for Scotland and will continue to be for decades to come. There are up to 24 billion barrels of oil and gas equivalent remaining, and it is essential that there is a stable and proportionate fiscal regime which encourages the investment, innovation and exploration required.

Speaking from Nigg Skills Academy, the Deputy First Minister said yesterday:

“The Chancellor has presided over a regulatory framework and fiscal regime which is not fit for purpose and his U-turn is a clear admission that the UK Government’s stewardship of the sector has been failing.

“The apprentices I met today will soon become part of our valued, skilled North Sea workforce which I believe will underpin the successful recovery of the sector.

“Our workforce are the very people that must be ultimately supported by the UK Government’s long overdue changes to the regulatory framework – which included a U-turn on a tax which the Chancellor himself introduced in 2011, that had an immediately damaging impact, destabilising existing projects and damaging confidence in the sector.

“A heavy price has already been paid by many in the industry because of the challenging situation in the North Sea, which supports thousands of Scottish jobs, compounded by the inaction of the UK Government, despite Scottish Government – and industry – calls for urgent change to the fiscal regime.

“We have consistently called for the UK Government to deliver a permanent shift to a more competitive and predictable North Sea oil tax regime, allowing investors to move their focus away from fiscal risk and towards the significant investment opportunities that remain.

“Investors must be assured that these measures will stand the test of time, providing the vital stability and predictability which has been lacking up until now. What we need is a long-term outlook, proper consultation with industry, and a truly collaborative approach to addressing the challenges the sector currently faces.

“The planned seismic surveys to boost offshore exploration in under-explored areas is a step in the right direction, however, we will continue to work with industry and the UK government to ensure that the fiscal regime incentivises exploration. We recognise that exploration also requires the appropriate regulatory expertise, which combined with appropriate fiscal measures will have an even greater potential to drive forward a resurgence in North Sea exploration.”

Notes To Editors

Cabinet Secretary for Fair Work, Skills and Training Rosanna Cunningham published a skills plan for the industry yesterday which is now available here.