UK Oil and Gas Industry Association : Supportive measures will strengthen industry emergence from downturn, says Oil & Gas UK

Welcoming the further measures to boost the UK oil and gas industry announced by the Prime Minister at a meeting with senior industry leaders this afternoon, Deirdre Michie, Oil & Gas UK's chief executive, said: 'The Prime Minister has signalled his on-going commitment to the UK oil and gas industry which we very much welcome. The meeting this afternoon was very constructive and the Prime Minister heard the current plight that companies around the table - and more widely across the sector - now find themselves in. There was also good discussion as to how the different parties can contribute to supporting this industry going forward.

'Coming on top of the UK and Scottish Governments' multi-million pound investment in infrastructure and innovation for Aberdeen and the surrounding region announced earlier today, the further measures announced this afternoon will help the industry address the difficulties it currently faces with the low oil price, and ensure it can look towards a more enduring future.

'Price downturns have been experienced before but the UK oil and gas industry's advancing maturity makes this one particularly difficult to weather and emerge from in robust shape. Measures to boost the health of exploration and investment alongside the supply chain and its widespread employment are therefore very welcome.

'Funding of additional seismic activity should open up opportunities for exploration at a time when drilling has collapsed to levels last seen in the 1970s, so is extremely timely. We also welcome the speed with which the OGA has published its MER UK strategy to promote collaboration and maximise economic recovery of the UK's oil and gas, following consultation with industry. We shall review the document in detail with our members over the coming days.

'The UK's world-leading oil and gas supply chain generates tens of billions of pounds a year in sales and supports hundreds of thousands of jobs across the country.

'To build on the domestic business, companies are increasingly looking to grow into overseas markets and the decommissioning sector so both the appointment of an 'ambassador' to help ensure access to those markets, with whom we will be seeking an early meeting, and the implementation of a decommissioning strategy are respectively very helpful dimensions to this package of changes.

'While the package announced today is very welcome, more still will need to be done to ensure the UKCS becomes the most attractive, mature oil and gas province in the world to do business in. Industry must continue to reduce its costs and improve efficiency but this alone will not be enough. Fiscal as well as regulatory reform have a key role to play in the transformation of the UKCS into a highly competitive, low tax, high activity basin attractive to a variety of operators and supporting a global supply chain. The 2016 Budget needs to deliver an effective package of measure to help extend late life operations and asset trading, promote exploration and boost investment. In line with HM Treasury's own strategy of continued fiscal reform, steps should also be taken in the Budget to deliver a further permanent cut in the headline tax rate.'
Ends

The Government's announcement is here.