Monday 2 March 2009

OIL & GAS UK COMMENTS ON DEPARTMENT FOR ENERGY AND TOURISM ROUND TABLE

Malcolm Webb gave evidence on behalf of Oil & Gas UK at the Scottish Parliaments Economy, Energy and Tourism Committee today in Aberdeen. He commented:

Oil & Gas UK is very pleased to provide evidence of the vital contribution made by the oil and gas industry to Scotlands economy to the Scottish Parliaments energy inquiry.

The UK oil and gas industry is of strategic importance, satisfying 70% of our primary energy demand, avoiding imports worth £40 billion a year and contributing a third of the UKs corporation tax to the Exchequer.

Over the last forty years of oil and gas production off Scotlands coasts, a wealth of technology and expertise relating to the industry has been developed onshore.

Indeed, nearly half the 450,000 jobs supported by the UK oil and gas industry are in Scotland, not only in sectors obviously related to oil and gas such as construction and engineering but also spanning sectors as diverse as legal, transport, communications and hotels. The majority of the jobs are highly skilled and value-adding and very well rewarded, each contributing on average £19,500 in payroll taxes to the Exchequer.

While the Scottish-based supply chain was originally developed to support domestic activities, it is increasingly reaching out into international oil and gas markets and has also diversified into other parts of the energy business, both at home and overseas. It now directly exports oilfield goods and services worth £2.3 billion around the globe and is considered the world leader in subsea engineering and decommissioning expertise.

This international activity, as well as the transferability of technology and expertise into the renewable energy and Carbon Capture and Storage (CCS) sectors offers huge potential for the Scottish-based supply chain to grow its earnings and exports, even as UK oil and gas production declines.

But ensuring the supply chain remains anchored in Scotland will not be easy. It is imperative that investment is attracted to the UK oil and gas basin to maintain a critical mass of activity but the banking crisis, global recession and high cost base is making that more challenging. As a result, Oil & Gas UK has asked the Government to take measures to free up the flow of capital to the industry and make changes to the tax regime, in order to improve the UKs attractiveness to investment.

ENDS

Britta Hallbauer Press & PR Manager 3rd Floor, The Exchange 2 62 Market Street Aberdeen AB11 5PJ Tel: 01224 577331 Mob: 07891769113 Email: bhallbauer@oilandgasuk.co.uk