Oil & Gas UK supports Expert Commission’s call for urgent fiscal reform
Oil & Gas UK has welcomed the report published by Scotland’s Independent Expert Commission on Oil and Gas as a constructive and helpful contribution to the debate about the future direction of the offshore oil and gas industry.
The report: Maximising the Total Value Added; was commissioned by the Scottish Government in advance of September’s referendum to provide insight into the steps needed to sustain oil and gas activity on the UK Continental Shelf (UKCS).
Oil & Gas UK says it welcomes in particular the report’s strong message of the need for urgent fiscal reform and also its recognition of the scale of the contribution which the sector makes, not just in terms of oil and gas production but through the jobs, expertise and the economic contribution of its supply chain.
Oil & Gas UK’s chief executive, Malcolm Webb, commented: “This report is a constructive and intelligent addition to the knowledge base concerning our industry’s contribution to the UK economy – not only in terms of oil and gas production, but also through the support of some half a million jobs though a thriving supply chain, active in both the domestic and export markets. The commission’s emphasis on the need for informed collaboration both north and south of the border in order to realise the full potential of the UKCS, echoes a widely–held sentiment across our industry.”
Key themes reflect findings from the Wood Review, notably the need for stability, predictability and international competitiveness in the regulation of the industry and the stewardship of remaining oil and gas resources. In addition, the report dives deeply into the fiscal regime, and contains a range of proposals to simplify the regime and stimulate investment.
Oil & Gas UK’s economics and commercial director, Mike Tholen, said:
“Today’s report offers a timely reminder of the need to simplify the fiscal regime and lighten the burden to encourage more investment in the North Sea. We look forward to exploring in more detail the possibilities which the report’s recommendations raise. We believe that up to 24 billion barrels of oil equivalent remain to be produced throughout the UKCS, the recovery of which will depend largely upon having the right fiscal regime in place.”
Webb concluded: “This report is a welcome addition to the Wood Report. Together these two reports provide excellent insights into our industry providing us with sensible and purposeful recommendations for the way forwards.
“We welcome the attention now being given to the long term future for our industry. The UK is and will remain dependent on oil and gas for the vast majority of its primary energy supply for many decades yet to come. This industry is therefore of vital strategic importance to the UK economy. Furthermore, it has the potential to continue generating significant economic benefit. We cannot afford to let it falter; the Expert Commission’s report makes a very valuable contribution to help ensure that will not happen.”