The UK cabinet minister said it is “important” that Chancellor George Osborne delivers for offshore firms in his budget this spring.
A raft of measures announced in the spending review this autumn have so far failed to stop widespread redundancies in the north-east as the oil price continues to tumble.
Last week, Prime Minister David Cameron came under-fire for suggesting a low oil price was “basically good” for the economy.
But Mr Mundell – Scotland’s only Conservative MP – has insisted Whitehall is “very alive” to the crisis in the industry.
Asked at a press conference in Edinburgh if he would support further tax cuts for North Sea firms in the budget, he said: “I think it is important that the Chancellor does look at the measures that are in the budget to support the oil industry.
“There are a number of issues that have arisen in relation to decommissioning, for example, and in relation to other incentives.
“The Chancellor is very alive to the issues in relation to the industry and I am sure the budget will contain support for the industry.”
The Dumfriesshire, Clydesdale and Tweeddale MP also said that the government would look to support the north-east through a proposed city deal for Aberdeen.
Aberdeen and Aberdeenshire’s bid aims for nearly £3billion worth of infrastructure improvements over the next 20 years, coupled with an economic strategy focusing on securing the city’s status as a world energy centre.
Mr Mundell said: “There are other measures we want to take in relation to support for diversification and infrastructure – not least the Aberdeen City Deal, which we are working very actively with Aberdeen and Aberdeenshire councils on.”
The Scottish Secretary, however, refused to be drawn on when the City Deal might progress further.
The cabinet minister also gave a passionate defence of a possible June referendum on EU membership, despite criticism it would fall just one month after Scottish elections in May.
He said: “I think the experience from Scotland is spending two years on a referendum is an inordinate length of time.
“I think that most people were engaged in those final four to six weeks when it was imminent, so I think there is not an argument against having a referendum in June.
“I think in fact there is a strong argument to have it then, subject to obviously there being the necessary agreement so that we can get on, have the debate and get the referendum out the way.”
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