Scotland’s finance minister has told the British government he is concerned that some of Britain’s remaining North Sea oil will never be recovered.
LONDON, Feb 15 (Reuters) - Scotland's finance minister has told the British government he is concerned that some of Britain's remaining North Sea oil will never be recovered as companies active in the area have scaled down investments due to the weak oil price.
John Swinney, who is also Scotland's deputy first minister, urged British finance minister George Osborne in a letter to cut taxes on oil and gas companies and to consider giving loan guarantees to the sector to avoid early field shutdowns and more job losses.
Scotland is home to most of Britain's oil and gas production and the oil market downturn has already led to around 10,000 job losses and salary cuts.
"The declining oil price has resulted in a number of North Sea projects being removed from company investment plans," Swinney wrote in the letter, published by the Scottish government.
"There is a serious risk that these resources will be permanently unrecoverable."
Scotland's First Minister Nicola Sturgeon said last month her government would ask for a meeting with Osborne to urge him to make oil and gas tax cuts in his annual budget announcement scheduled for next month.
A meeting has not yet taken place, a spokesman for the Scottish government said.
More specifically, Swinney asked for a reduction in the headline oil and gas tax rate, more support for exploration, access to decommissioning tax relief and loan guarantees for oil and gas investors.
"We are committed to supporting our oil and gas industry," said a spokesman for Britain's finance ministry.
The head of Britain's oil regulator said last week the country would offer more flexible North Sea oil and gas licences in its next tender round, in a bid to make exploration work in the mature basin more attractive to oil and gas companies.
Exploration work in the North Sea has dropped to just a quarter of levels seen at peak time around the turn of the century as costs to look for and operate oil and gas fields in the British part of the North Sea have soared.
The British and Scottish governments announced a 250 million pound ($362 million) deal last month to support the Scottish city of Aberdeen, hit hard by job losses in the oil sector.
($1 = 0.6910 pounds)
(Reporting by Karolin Schaps; editing by Adrian Croft)
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you