Sturgeon makes plea to PM
DAVID Cameron has been called on by Nicola Sturgeon to take “immediate action” and not wait until the March Budget to help the beleaguered North Sea oil and gas industry.
The First Minister has written to the Prime Minister to urge swift measures to support investment and exploration in the sector, including a reversal of the 12 per cent tax hike on profits introduced by the Treasury in 2011.
Amid fears of more job losses, she stressed that an early commitment to reduce the Supplementary Charge on profits would give operators confidence and discourage premature decommissioning.
“I thus ask,” she wrote, “that a substantial package of measures be announced without further delay to safeguard investment, jobs and the long-term sustainability of the North Sea. If this is not forthcoming, UK Government policy in relation to the industry will be found seriously wanting once again.”
As BP and ConocoPhillips announced
500 job cuts because of “toughening market conditions” brought about by the sharp fall in the oil price, industry insiders suggested the low price, currently below $50 a barrel, could last for up to three years.
In London, more strong hints were given by the chancellor and his Coalition colleagues that tax cuts were in the pipeline for the forthcoming Budget to help the beleaguered sector.
George Osborne accepted the oil and gas industry faced “a real challenge”, which was why North Sea taxes had already been cut.
“Of course with the Budget approaching, we’re going to look at what more we can do to support investment there.”
He added: “We want the maximum benefit for the industry not just in Scotland but the whole of the UK.”
Ed Davey, the energy secretary, in Aberdeen to discuss the crisis with industry representatives, said the falling oil price could result in “some difficult decisions for many oil and gas companies”.
He announced the creation of an urgent commission to “come up with practical measures to mitigate the immediate risks that the downturn in prices presents us with”.
Acknowledging there was “a lot at stake,” Mr Davey said his announcement showed “we are taking these problems extremely seriously”.
Making the political point that if Scotland had to face the current crisis as an independent country, its financial situation would be “dire”.
Yet Jake Molloy, regional organiser of the RMT union, representing offshore workers said: “This is about sustaining oil and gas production from the North Sea, about sustaining jobs, about maintaining the infrastructure, which will produce and sustain oil production and about keeping the economy buoyant beyond May.
“Because all we’re seeing right now is party politics rather than meaningful intervention and support for an industry in crisis.”
At Holyrood, a row broke out over the SNP Government’s plan to secure devo max and its potential impact on Scotland’s public finances as its new oil revenue forecasts might not be published before the General Election.
Scottish Secretary Alistair Carmichael said the UK Government would join the jobs taskforce set up by Ms Sturgeon. “This is a time for Scotland’s two governments to work together,” he said.
Mr Molloy denounced what he said was the “slash and burn approach of yesteryear” from oil companies, which threatened to damage the industry long term.
“We anticipate this is just the beginning of BP cuts as we’ve seen the rest of the operators announce further cuts to offshore staff, which will have a knock-on effect with the supply chain and everything else,” he added.
BP, which employs 4,000 people in the North Sea and another 11,000 across the UK, announced the loss of 200 onshore staff and 100 contractors while ConocoPhillips is to axe 230 jobs, cutting its UK workforce to just over 1,400.
Royal Dutch Shell and Chevron announced job cuts in the North Sea last year.