The oil & gas sector is of vital importance to both the UK and Scottish economy and is an industry with a strong future.
Since the 1970's, approximately 39 billion barrels of oil equivalent (boe) have been extracted from the UK Continental Shelf. Current estimates suggest that there are up to 24 billion boe still to be extracted. With recent increases in oil & gas prices this means the potential value of remaining oil & gas reserves could be significant.
The oil & gas sector is a major source of tax revenues and to date has provided over £300 billion in revenues (2011 prices) to the UK Government. North Sea revenue is forecast to raise £11.1 billion in 2011/12. The Scottish Government proposes that a proportion of Scotland's oil and gas revenues are invested directly into a Scottish oil fund. We believe strongly that an oil fund will help raise sustainable growth in Scotland, provide greater macroeconomic stability, and support our transition to a low carbon economy.
The oil & gas sector also acts as a major source of employment, supporting 440,000 jobs across the UK with 45% of these in Scotland (196,000). The skills and knowledge developed in Scotland since the development of the North Sea are a key strength for Scotland. Many of these skills will continue to play a vital role in developing our future, both within oil and gas but also through their transfer and adaptability to other sectors such as offshore wind and Carbon, Capture and Storage.
While licensing, exploration and regulation of the oil and gas industry is the responsibility of the UK Government, through the Department for Energy and Climate Change (DECC), other important activities such as business development and growth are devolved matters to the Scottish Government. Scottish Ministers work closely with the industry to maximise and prolong offshore activity.
The Scottish oil and gas industry, particularly in terms of the supply chain is a world-leader in many areas including subsea, well management and training services. We are ambitious to maximise the opportunities that such a position will provide. Along with the sector itself, Scottish Enterprise play a key role in the continuing promotion and development of the energy supply chain in Scotland. The Scottish Government have also established the Oil & Gas Industry Advisory Group which advises Ministers and enterprise agencies on key Scottish energy issues and informs policy development for the sector.
We engage with the UK Government through PILOT - a joint programme involving the UK Government and the wider UK oil & gas industry with the aim of securing the long-term future of the industry. The Scottish Government is represented by the Minister for Energy, Enterprise and Tourism.