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North Sea oil is 'winding down'

The North Sea oil industry is winding down and politicians and workers must start planning for the future "pretty quickly", oil veteran and government adviser Sir Ian Wood has warned.

Sir Ian, the founder of the Wood Group who conducted a recent review of offshore oil and gas recovery for the UK Government, said workers in Aberdeen have taken oil for granted but now need to change their thinking.

He has urged the SNP - who he praised as an able Scottish Government - to put their ambitions for Scottish independence "on the back burner for a long, long period of time" and focus on using their "significant additional powers" to make Scotland a better place.

"I had known Aberdeen pre-oil, I won't know Aberdeen post-oil, I will have gone, but there are generations out there who have always just taken it for granted, and who have become very, very dependent on the oil and gas industry," he told The Times' Scottish edition.

"They need to change their thinking. There is a potential way (forward) with the right kind of plan, and the right kind of people, and the right kind of local authority and the right kind of reception from the Scottish and UK governments to work our way through this.

"But we need to get started pretty quickly.

"We have this notion that in some undefined time, say 30 or 40 years, oil will begin to wind down.

"The fact is that it will begin to wind down in the next ten years. The fact is it is winding down now, actually, but very slowly.

"So you need to start taking that on board. But it needs a plan, it needs some resources."

He said Aberdeen has become a cosmopolitan, enterprising, exciting place to do business but must "stop looking backwards, look forwards, look at the challenges we have and how we are going to deal with them."

He added: "I kind of hope now, when we have got the macro devolution details sorted out, that the SNP government will say, 'Well, now we've got significant additional powers, let's go ahead and solve a lot of Scotland's problems and let's make Scotland a better place to live in'.

"And let's put that divisive referendum away on a back burner...for a long, long period of time."

Sir Ian called on the UK Treasury to reduce the tax on oil profits by an "achievable" 10% at least to stimulate investment.

"The problem here is that it will not be the beginning of the end, but it could be a period of what I am going to call irreversible damage, whereby we don't just lose resources, we don't just lose infrastructure, we actually lose some confidence and sentiment from the operators," he said.

He added that there are still at least another ten billion barrels to be recovered from the North Sea, but it could be as much as 16 billion.

"The Clair field in the west of Shetland may well be the biggest field in the North Sea, bigger than Forties and bigger than Brent. It will take a long time to develop, it's complex geology, but there are very significant prospects there," he said.

Kevin Stewart, SNP MSP for Aberdeen Central, said: "It is absolutely vital for the confidence of the firms investing in the North Sea that the UK government cuts the charge.

"Aberdeen is a hub for international activity and several major fields will be in production for decades to come - and we share the support for maximising recovery which Sir Ian said in his report could generate an additional £200 Billion.

"By ensuring that we operate at the innovative end of the industry, developing new technologies and having a substantial cohort of companies involved we can operate successfully.

"However the right tax regime is needed - and for the sake of the short and long term well-being of the industry the UK government needs to listen to Sir Ian, other industry leaders and to the Scottish Government and cut the supplementary charge immediately ."

Scottish Liberal Democrat leader Willie Rennie said the chances of the SNP putting its ambition of indepedence on the back burner are "pretty limited".

"To be fair it is why they exist after all," he said.

"Sir Ian has got it exactly right. If the SNP ignore the new powers that are being delivered in favour of continuing their campaign for independence by the back door it is Aberdeen and the rest of Scotland that will pay the price.

"The SNP spent this week hunting for reasons to run down Home Rule powers that will see control over £20 billion in tax powers come to Scotland and create a Scottish welfare system for the first time."

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