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Support for UK oil and gas urgently required

Published:  03 February, 2015

An unpredictable and harmful business environment has put the UK’s valuable oil and gas industry at great risk, according to Oil & Gas UK’s chief executive, Malcolm Webb,

who warned senior political figures at the recent Aberdeen Oil and Gas Summit that realism about the continuing prominence of oil and gas in the UK’s energy supply should be a guiding principle in future policy decisions.

Speaking to an audience including the Rt Hon Nicola Sturgeon MSP, First Minister of Scotland, and the Rt Hon Alistair Carmichael MP, Secretary of State for Scotland, Webb commented that: “Britain’s great oil and gas industry has over the last four decades overcome challenging geology and volatile commodity prices to provide hundreds of thousands of high skilled jobs, generate hundreds of billions of pounds in tax revenues and foster innovation.

“However the inconsistent and unpredictable government policy it has faced, now combined with sharply rising costs and a sudden drop in oil price, has dealt a blow which is doing real and potentially long-lasting damage.

“We in the UK must all wake up to the fact that our reliance on oil and gas for our transport, heating and electricity needs, which currently sits at 73% of total energy, is not going to wane for several decades yet. In stark contrast to the many benefits of producing our own indigenous oil and gas, importing energy does not support high skilled British jobs or the public purse and damages the country’s balance of trade and exports of goods and services.”

He added that if we are to avoid lasting damage to this industry and its £35 billion supply chain, action must now be taken. Webb explained that the industry is having to take tough decisions and implement necessary cost reduction and efficiency improvement measures. He stressed that alongside this, the Department of Energy must proceed as quickly as possible with the full establishment of the new Oil and Gas Authority, and HM Treasury must radically reduce the tax burden on this mature oil and gas province.

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