Promise to support investment in North Sea infrastructure.
Cabinet Secretary for the Economy Keith Brown today welcomed assurances he has secured from the UK Treasury that more will be done to support investment in offshore oil and gas infrastructure.
Mr Brown has made repeated calls on the Treasury to honour promises made in last March’s budget to use the UK Guarantees Scheme for oil and gas infrastructure to help secure new investment in assets of strategic importance.
This is seen by the industry as an essential way of securing funding during the ongoing period of low oil and gas prices.
At a meeting in London on 30 June, Mr Brown received assurances from the UK Government’s Chief Secretary to the Treasury Greg Hands that this work will now ‘progress with speed’ and has written to key stakeholders and the Scottish Parliament’s Economy Committee to advise them of this progress.
Mr Brown said:
“The Scottish Government strongly believes that the North Sea oil and gas sector can have a bright future for years to come. We are doing everything in our powers to bring this about but it continues to require a concerted effort by government, industry, and regulator.
“I aim to listen and, where I can, to act in the best interest of this important industry – however, the UK Government retains control of the key taxation levers affecting the sector, and must take the action needed to protect jobs and enable the industry to best deal with the challenges it faces.
“This issue was quite rightly raised at the Economy Committee last Tuesday and I undertook to press the UK Government again on this important matter. Despite repeated requests from the industry and the Scottish Government, there has been little progress on this issue so far. That is why I am pleased to have received the necessary assurances from Mr Hands that work on loan guarantees to support investment in offshore infrastructure – which are essential for the industry to secure funding at this moment in time – will now proceed with speed.
“The UK Government must now deliver urgently on this promise. While this remains a difficult time for the industry and its workforce, these assurances from Mr Hands are an important step forward in supporting the oil and gas sector and I will be staying in close touch with the UK government to ensure the promised action happens, and happens quickly.”
Previous news releases mentioning loan guarantees can be read here:
Ministers meet oil industry leaders in Aberdeen - http://bit.ly/29dD3o5
Brown: North Sea can have a bright future - http://bit.ly/1TZtKsn
Mr Brown’s full letter to the economy committee is as follows:
At the meeting of the Economy Jobs and Fair Work Committee on 28 June, the Energy Minister, Paul Wheelhouse and I outlined the key challenges faced by the oil and gas sector at this time. I also took the opportunity to set out the steps taken by the Scottish Government to support the industry and its workforce.
As part of the solution, I reiterated the Scottish Government’s view that loan guarantees to support investment in offshore infrastructure are essential for securing funding solutions at this stage of the economic cycle.
At the Budget, the UK Government committed to consider how the UK Guarantees Scheme could be used to support investment. However, as I have publically stated on a number of occasions, there appears to have been a lack of progress on this issue since the March Budget.
I am writing to update you on the outcome from my recent meeting with the UK Government’s Chief Secretary to the Treasury, Greg Hands MP, where I took the opportunity to reiterate the need for urgency in this area.
The Chief Secretary has now acknowledged that this work must progress with speed to deliver a solution. I am assured that this will be done with the engagement of key stakeholders, which will include the Oil & Gas Authority and Oil & Gas UK, among others. I am pleased to be able to report this update to the Committee.