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Good times ahead for North Sea oil industry, Economy Secretary says

Published 03/06/2016

Keith Brown repeated his call for the Scottish Government to have control of the economic levers in the North Sea
Keith Brown repeated his call for the Scottish Government to have control of the economic levers in the North Sea

The North Sea oil industry has a long future with "good times ahead" if it can work past the current downturn, according to Holyrood Economy Secretary Keith Brown.

Mr Brown said it is important to look beyond oil tax receipts, which incurred the first loss in history last year, to the supply stream which continues to generate hundreds of millions of pounds for the Exchequer.

He repeated his call for the Scottish Government to have control of the economic levers in the North Sea and insisted the SNP's ongoing campaign for independence is not contributing to uncertainty in the industry.

Mr Brown and Energy Secretary Paul Wheelhouse met with Ray Riddoch, managing director of Nexen, at the upstream oil firm's headquarters in Aberdeen.

Speaking at a short press conference, Mr Brown welcomed the announcement of 500 new construction jobs at BP's Clare Ridge project.

"There's a great deal of positivity around this," he said.

"The industry sees good times ahead if they can get through these challenges.

"We heard today news of over 500 new jobs in the sector and let's not dismiss these jobs as being just construction jobs, these are very important jobs.

"They are individuals that may otherwise be lost to the local area if they didn't have gainful employment, so there is potential.

"We have seen some recovery in the oil price since January and virtually a doubling the price per barrel.

"As we have just heard from people who know far more about this than me, you can't judge what is going to be in the future, but let's try and build on that, and also build on the positivity that is present in the industry. It's got a long future ahead of it."

He added: "There's huge economic activity beyond the tax receipts of oil.

"There's a huge industry in terms of the supply stream here as well, which produces hundreds of millions of pounds for the exchequer.

"Of course it is my position, and Paul's position, that we want to have the economic levers in Scotland but we recognise that is not currently the situation.

"What we are focusing on, and what a number of members of the industry have told us, is that the measures taken by the UK Government in the budget in relation to loan guarantees are welcome but they're not happening yet.

"There is a real urgency about the situation here in the north-east, so I will be writing today to Greg Hands to say 'let's get on and do this'."

He continued: "In relation to a second independence referendum, every time I hear it, it is mentioned by others, particularly the Conservatives.

"You have here somebody hugely experienced in the North Sea oil industry, and the oil industry globally, who will tell you these things are not about how Scotland governs itself.

"These things are about the world oil price, fluctuations in that price, the oversupply of oil in the market and lower demand, for example, from China and around the world, these are the things that are driving the situation in the north-east.

"Of course, I would say that a Scottish Government responsible for these things could be more pro-active, could be more responsive more quickly.

"But the simple fact is the industry sees itself as the main agent for change in some of the things that have to happen.

"From the meeting that we just had with Ray, that is what the industry is focused on. They're not talking about referendums, they're talking about what they can do to address the challenges they face."

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