The Scottish Government is heaping pressure on George Osborne to provide immediate support for oil and gas exploration in the North Sea.
Economy Secretary Keith Brown will tell an audience in Aberdeen on Tuesday that the last budget was a “missed opportunity” for delivering much needed fiscal support.
Exploration levels currently sit at an all-time low, with recent projections for 2016 estimating half the number of exploration wells compared to 2015.
He will also claim the UK Government has failed to make progress on its commitment to use the UK Guarantees Scheme for oil and gas infrastructure to secure new investment in important assets.
The UK Treasury has defended its record on supporting the North Sea.
Mr Brown is expected to tell delegates at Oil and Gas UK’s ‘Open for Business’ conference: “The UK Government retains control of the key taxation levers affecting the sector and must take the action needed to protect businesses and jobs.
“Although the fiscal changes announced in the March budget were welcomed, it was ultimately a missed opportunity as a number of challenges remain.
“One of the most critical is exploration. Exploration is the future life-blood of the industry, without which we will never realise the 20 billion barrel potential of the North Sea.
“Higher rates of exploration are crucial if we are to maximise economic recovery and avoid premature cessation of production.
“While funding for seismic surveys will have long term benefits, further support must be provided for exploration and, indeed, enhanced oil recovery.
“With costs much lower and spare capacity in the market, it is now the time to undertake exploration activity.”
Mr Brown will suggest such views are “backed up” by more than half of companies operating in the North Sea, who want to see a basin-wide fiscal stimulus to encourage exploration and preserve the stimulus to late-life fields.
He will add: “Access to finance continues to be considered one of the greatest challenges in the basin, but we have heard no further details since the Budget on these critical issues.
“The UK Government must provide more clarity on their use – they could potentially be used to ensure critical assets and infrastructure remains operational, preventing systemic risks.
“The UK Government must not consider the last Budget to be job done. Further fiscal support for exploration is needed now.”
A spokeswoman for the UK Treasury said they had already announced tax measures worth £2.3billion to the North Sea industry.
She added: “This government is clear that the broad shoulders of the UK are 100% behind our oil and gas industry and the thousands of workers and families it supports?
“No other government has made fiscal changes as extensive in response to falling oil prices.”
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