The SNP has said the UK Government’s £5million investment in North Sea exploration was “welcome” but “small”.
Drew Hendry, the SNP’s energy spokesman in Westminster, accused the UK Government of failing to tackle issues including the reform of decommissioning tax relief and concerns over Brexit.
Industry has repeatedly asked the government to smooth the transfer of late-life assets by letting oil companies transfer their tax histories, meaning buyers could benefit from tax relief built up by sellers.
Read more: Decom tax reforms would create ‘sweet spot’ for industry and Treasury
Mr Hendry was speaking after Chancellor Philip Hammond said more money would be made available for surveys on under-explored parts of the UK continental shelf.
During a visit to Aberdeen, Mr Hammond said the oil and gas industry remained vital for the Scottish economy and the UK as a whole.
But Mr Hendry said the new measures did not go far enough.
Mr Hendry said: “The fact that the Tory government is recognising the need to invest in exploration in the North Sea is welcome but, make no mistake, this is a very small step to take.
“They need to urgently address the key concerns that are raised by the industry. To put it into perspective, the UK treasury has benefitted to the tune of £300billion from tax revenues over the years and, in spite of repeated calls from the sector, they are still failing to address the status of late life assets, the tax regime and the growing concerns over the withdrawal from the common market and customs union for operations and staffing, all of which need urgent answers.”
Oil and Gas UK chief executive Deirdre Michie said the funding was a “welcome boost”, adding that the UK Government had already made some positive changes to the oil and gas sector’s fiscal regime.
But Ms Michie also called for the Treasury to use the Autumn Budget to announce decommissioning tax reforms to support the sector.
She said: “We need HM Treasury to enable transferable tax history in the Autumn Budget, which we believe will further unlock the transfer market for late-life assets, encourage more investment, and delay decommissioning for as long as possible with the associated benefit to the Exchequer and the UK.”
Oil and Gas Authority (OGA) chief executive Andy Samuel said he was “delighted” with the funding, which would be used to provide industry with a range of “high quality new data”.
Mr Samuel said the move would “significantly help address exploration risks and uncertainties and promote frontier and under-explored areas”.
An OGA spokeswoman said money could be used for a combination of geoscientific studies, sampling and analysis of existing data, application of digital technologies, and feasibility studies.
John Scrimgeour, executive director of the energy institute at Aberdeen University, said that although £5million is “not an awful lot” of money, he thought it was “great” that the government was doing something to stoke exploration.
He said making new data available to large and small companies could only encourage exploration, which has been “in the doldrums” in recent years.
“We need to encourage exploration if we are going to sustain UKCS production,” he added.
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