Alex Salmond has told oil and gas leaders that the Scottish Government will part-fund a new offshore regulator in an independent Scotland.
Speaking at the Oil and Gas UK industry conference in Aberdeen, the first minister said it goes against the spirit of the recent Wood Report to expect industry to solely foot the bill – as is being proposed by Westminster.
He also pledged to base the new regulator – which is being set up to take over the oil and gas function of the Department for Energy and Climate Change (DECC) – in Aberdeen.
Last night, his comments were welcomed by Oil and Gas UK chairman Malcolm Webb, who has been campaigning against the industry having to fund the new body.
Mr Salmond told delegates that the energy sector had a “a strong and stable future in an independent Scotland”.
He said success had been “despite” the UK Government’s stewardship of the industry, “rather than because of it”.
He cited Chancellor George Osborne’s now infamous £10billion tax raid on the sector in 2011 as an example of why he believes the industry would benefit if Scotland votes Yes in the referendum.
He promised that no major tax changes would take place without full consultation with the industry.
“I want to show how an independent Scotland – with specialised civil servants, with the appropriate expertise, based here in Aberdeen to work on oil and gas – will manage our remaining oil and gas reserves more effectively,” he said.
“And I want to highlight four things – tax stability, understanding of the industry, an improved industrial base, and an oil fund – which will be developed after independence, and which will bring lasting benefits not just for industry, but also for the public interest.”
He added: “Let’s have a different half-century in terms of the relationship between government and industry than we have had in the last half-century.
“It’s 50 years since the first exploration licences were released in the North Sea in 1964.
“This industry will last for another 50 years, if not more, and therefore to maximise the benefits for the industry and the people, let’s have a different style of co-operation.”
Turning to the new regulator, the first minister capitalised on the UK Government’s decision to ask industry to fund the new regulator.
The Westminster coalition revealed in the Queen’s Speech that it will table legislation within weeks for a new “levy” that is expected to cost the sector tens of millions of pounds.
The move is part of the implementation of the recommendations of Sir Ian’s landmark review into the future of the offshore industry.
A new bill will enshrine the principle of “maximising economic recovery of petroleum in the UK” into statute for the first time, and will also set up the new regulator proposed by Sir Ian in February.
Both changes have been welcomed by industry leaders, but plans to ask them to foot the bill for the new agency was branded a “sting in the tail”.
Mr Salmond said: “The creation of a new regulator should not be used as a way for government to cut its budget for oil and gas regulation.
“It is crucial to the authority of the new regulator that it is funded as a partnership. It has to be a partnership if it is going to work.”
And he guaranteed that the new regulator would be based in Aberdeen – which will also co-host the energy ministry with Glasgow in an independent Scotland.
“Sir Ian Wood’s review gives the template for that but it must be taken forward,” he said.
“The UK Government says Aberdeen is the front runner for the new regulator. It says it’s in pole position when it should be in sole position.”
Mr Webb said: “We have made it clear that we believe government should absorb at least part of the cost.”
Chief Secretary to the UK Treasury, Danny Alexander, will lay out Westminster’s vision for UK Continental Shelf at the conference today.
Mr Alexander will be followed by Sir Ian Wood, who will introduce a session on Maximising Economic Recovery, in which a number of North Sea regulators will give their views on best practice in the region.
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