CONFIDENCE GROWS DESPITE MAJOR CHALLENGES AHEAD

CONFIDENCE is slowly returning to the oil and gas sector but “considerable challenges” remain, sector leaders have said.

Industry association Oil & Gas UK are calling for an extension to investment allowances to maintain activity ahead of tomorrow’s Budget.

Last week, the Scottish Government challenged Chancellor Philip Hammond to “step up to the plate” by improving decommissioning tax relief for the North Sea.

Oil and Gas UK’s business outlook report said a two-year drive to “improve efficiency, streamline costs and boost productivity” was successful.

Production was said to be rising, with 1.73million barrels of oil equivalent per day (BOEPD) in 2016, which could increase to 1.9million by 2018 with investment, the report said.

It is anticipated 13 to 18 new fields could start producing this year, contributing up to 600,000 barrels per day by 2018.

Oil and Gas UK chief executive Deirdre Michie said: “The challenges ahead, particularly for companies in the supply chain, are still considerable.

“As one means to help address this, we are asking the Treasury to extend the investment allowance to operational activities that are focused on maximising economic recovery.”

WWF Scotland director Lang Banks urged any Government incentives to be used only to support those with engineering skills in the oil and gas industry to apply them “to support clean renewables”.