Wednesday 17 June 2015

Sturgeon seeks incentives for oil and gas industry

Sturgeon seeks incentives for oil and gas industry

Nicola Sturgeon is to call on the UK Government to “urgently” consult on incentives for oil and gas exploration in the North Sea.

Scotland’s First Minister will make the demand at the annual oil and gas industry conference in Aberdeen today.

Exploration in the North Sea reached its lowest level in at least two decades last year, with only 14 exploration wells drilled compared to 44 in 2008, according to the Scottish Government.

It adds the UK Government committed to looking into options to boost exploration by providing incentives in December last year which is long overdue.

Ms Sturgeon will suggest financial incentives such as a new exploration tax credit or an expansion of the investment allowance.

[caption id="attachment_99036" align="alignright" width="350"]Scotland's First Minister Nicola Sturgeon. Image: Scottish Government Scotland's First Minister Nicola Sturgeon. Image: Scottish Government[/caption]

Speaking ahead of conference, she said: “North Sea exploration needs urgent support.

“The benefits from exploration not only boost future production but will also be felt across the supply-chain and the wider economy.

“The establishment of the Oil and Gas Authority has been an important development, which will help address some of the challenges. However, it is essential that the tax system is also appropriate given the issues faced by industry.”

Ms Sturgeon added: “The critical issue is that the UK Government needs to deliver on its commitment to consult on incentives to boost exploration in the North Sea and this consultation must be launched urgently - so that firm proposals can be announced in the Autumn Statement.”

A government spokesperson said: “We can’t control the oil price – but we’ve delivered on the Wood Review recommendations and established the Oil and Gas Authority.

“In addition, the package of support announced in the Budget in March is expected to encourage over £4 billion of additional investment in the UK’s oil and gas industry over the next five years."

Written by

Bruna Pinhoni

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