PLANS are being made to step up pressure on the government to act to maintain offshore development despite the recession, following a meeting in Westminster last night.
Members of the Commons all-party oil and gas group were given a presentation on Scottish Enterprise and Scottish Council for Development and Industry’s activity report indicating long-term prospects remain strong despite the difficult economic climate.
The survey of the industry’s supply chain revealed growth to a record £14.2billion over the past year, but signs of uncertain times for the sector ahead.
After the briefing West Aberdeenshire and Kincardine Liberal Democrat MP Sir Robert Smith said the message was that there had to be action by the Treasury in the form of tax incentives to maintain investment in North Sea development. He urged, in particular, a new mechanism to make tax relief on oilfield development available “up-front” instead of requiring developers to make a profit which would benefit from tax relief.
He said: “The North Sea is not a lame duck industry looking for a bailout but it needs a fair share of the tax risk to be taken by the government to enable the country to benefit in the longer run.
Angus MP and SNP energy spokesman Mike Weir said the industry had been doing well but there were “heavy clouds on the horizon”.
He said new firms operating in the North Sea required bank loans to finance new drilling and other development work. He urged steps to make more up-front finance available.
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