The chief executive of Oil & Gas UK issued a rallying call to the chancellor today for measures in this month’s Budget to prove he has confidence in the future of the beleaguered sector.
Deirdre Michie said she believed the Treasury had been listening and was “quite open” to the evidence-based arguments.
She also welcomed the steps taken so far, including the recent commitment to the Aberdeen City Region Deal, more money for seismic surveys and the establishment of a senior ministerial group.
But she urged George Osborne to provide “reinforcing proof” through a “significant, permanent” reduction in headline taxes.
Among the measures the industry body is appealing for are steps to help unlock the late life asset market and encourage exploration.
It wants the chancellor to permanently remove the special taxes from all discoveries that are made over the next five years.
In addition, it is seeking action to strengthen and support decommissioning liability, helping new players to come in and establish the southern North Sea and wider UK as a decommissioning centre of excellence.
Ms Michie told delegates at the annual Southern North Sea Conference in Norwich: “I think the Government is listening. I think they have been quite open to our hopefully evidence-based arguments.
“I think they understand we are looking for a reinforcing confidence statement and move by them.
“They have done a lot … to reinforce that they do think this is an industry that is worth supporting, that it is a very important indigenous industry that we should continue to support going forward.
“How that translates in two weeks at the Budget I don’t know, but we are hopeful … positive news in the Budget would certainly be reinforcing proof of this understanding.
“We do need short-term intervention to stimulate activity and ensure a sustainable future going forward.
“We want government to work with us and they are looking to work with us. In particular we need the Treasury to deliver on its drive for investment plan by reducing the fiscal burden placed on industry.”
She said the UK Government’s support to date was welcome, but stressed it was also “much needed”.
In a rousing conclusion, she added: “We are an industry on an edge with serious challenges to address if we are to have a sustainable future.
“But we are also an industry that has demonstrated its resilience, its determination and its ability to survive time and time again.
“I know we can and that we will do that again.”
The chief executive has also called for lessons to be learnt from the historically “tight ship” run in the southern North Sea.
She said costs had increased in the region over the course of the downturn whereas in other parts of the UK Continental Shelf they had been reduced.
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