Scotland Office Minister David Mundell insists the UK Government is using its global influence and domestic policies to help secure the future of the oil and gas sector.
Taking a thinly-veiled swipe at the SNP’s independence plans, the minister claims only the UK can deliver the support required over a sustained period to get the most out of the North Sea.
In a speech at an Xcite Energy dinner in Aberdeen today, the Conservative MP will warn against “oversimplistic” claims about the value of remaining reserves while insisting Westminster was creating the right conditions to make the country a commercially attractive choice for companies.
The comments follow the launch on Monday of a new independent review of North Sea production, to be led by Sir Ian Wood.
“For the United Kingdom, the Oil and Gas Industry is a vitally important strategic resource – as a contribution to the UK’s energy security – but also as a source of jobs and revenue,” will tell attendees.
“The United Kingdom can deliver the help required to the Oil and Gas industry over a sustained period to get the most out of the North Sea.
“We can absorb short-term costs for long-term gains; create certainty; and encourage billions of pounds of vital new private sector investment. “
He will add: “The UK Government is firmly committed to using our global influence to help companies exploit opportunities and break down trade barriers.
“Exploiting these global markets can safeguard jobs and stimulate growth for the oil and gas supply chain in Aberdeen and rest of the UK.”
North Sea oil and gas is a key issue in the debate over Scotland’s constitutional future, with nationalists pointing to Scotland’s flourishing energy rich neighbours such as Norway, but Unionists arguing that the resource is too volatile to build a new economy on.
Mr Mundell said: “There is no doubt that significant reserves of oil and gas remain under the North Sea. But as the industry knows and understands, volumes of reserves do not necessarily equate to profitable recovery nor to increasing revenues for the Exchequer.
“It is over simplistic to claim – as some try to do – that “there’s a trillion barrels or more just waiting to be pumped ashore so don’t worry – the money will keep rolling in.
“The truth is that each barrel gets more expensive to extract. The profits get more marginal. There will still be large fluctuations in commodity prices.”
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