Alex Salmond has called for more incentives to encourage oil and gas production off the Scottish coast.
But last night the first minister was accused of being in denial over “plummeting” North Sea reserves, which he claimed would last for decades.
The SNP leader said there were 20 gas fields off the west of Shetland that were lying untapped because of the cost of development.
The problem lies in providing the infrastructure to get the gas onshore from the hostile waters off Shetland. There are several options but it is estimated that a pipeline will be hugely expensive.
Mr Salmond said “calculated, systematic exploration incentives” were important and he put forward proposals to the UK Budget two years ago.
“It’s also a question of infrastructure incentives,” Mr Salmond said. “There are 20 discovered gas fields off the west coast of Scotland at the moment, with no plans for development because they need a shared infrastructure. The investment incentives that are required need to be carefully targeted. They’ll cost a bare fraction of the increases in oil taxation and with these in mind and with a government that is passionate about the industry and infrastructure of Scotland, we can be confident that the oil and gas revolution will continue for decades to come in our country.”
Mike Tholen, Oil & Gas UK’s economic director said he was aware of a wide range of projects which were failing to attract investment, including developments west of Shetland where the costs and commercial exposure were “daunting”.
The Department of Business, Enterprise and Regulatory Reform said it was working with the industry to find a commercial solution to exploiting the Shetland fields.
A spokeswoman said: “The Treasury is consulting with industry on whether there is a need for any special measures to encourage development of marginal discoveries.”
Green MSP Patrick Harvie accused Mr Salmond of being in “complete denial over plummeting North Sea production”. He said production peaked in 1999 and had been declining year-on-year since.
He was backed by Chris Skrebowski, editor of the Petroleum Review, who said: “Alex Salmond’s predictions are simply wrong.”
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