Scotland politics

Keith Brown: North Sea 'can have bright future'

oil platform Image copyright PA

Scotland's new economy secretary has said the country's oil and gas industry can have a bright future despite the recent downturn in its fortunes.

But Keith Brown called for greater support for the sector as he met key industry figures in Aberdeen.

North Sea firms have been badly hit by a sustained period of low oil prices, with tens of thousands of jobs lost.

Mr Brown said a concerted effort is needed to overcome the "considerable challenges".

He was accompanied by Scottish Energy Minister Paul Wheelhouse for the visit to Aberdeen, where they met representatives of oil and gas firms Nexen and EnQuest, as well as trade unions, industry body Oil and Gas UK and regulator the Oil and Gas Authority.

Economic levers

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.

"Given the considerable challenges faced by industry, this will require a concerted effort by all stakeholders and today's visit will help me to play as strong a role as possible in that process."

Mr Brown said the Scottish government was doing everything in its power to support the industry, but that the UK government retained most of the important economic levers affecting the sector.

He highlighted what he described as a lack of progress towards using the UK Guarantees Scheme for oil and gas infrastructure where it could help secure new investment in assets of strategic importance.

He said the UK government made the commitment in the Budget in March.

Image caption Keith Brown was appointed economy secretary after May's Holyrood election

Mr Brown said: "Sustaining critical infrastructure in the North Sea is a key priority and the UK government must act quickly and decisively to deliver this commitment.

"The oil and gas industry is an important part of the Scottish economy and the downturn has had a significant impact on the industry and its workforce."

'Innovative and competitive'

The North Sea contributed £10.9bn to the Treasury just five years ago.

But earlier this month, HMRC said the UK government had incurred a loss from North Sea oil and gas production for the first time since records began nearly 50 years ago.

Speaking at the time, the UK government's Scottish Secretary, David Mundell, said it was doing everything it could to support the North Sea industry to "become innovative and competitive on a global scale."

He added: "No other government has supported their industry so extensively.

"We have established the Oil and Gas Authority to drive greater collaboration and productivity within the industry, and in the last two budgets we announced major packages of tax measures worth £2.3bn to ensure the UK Continental Shelf remains an attractive destination for investment."

Mr Mundell has been in Texas this week, where he was attempting to boost support for the North Sea oil sector.

Meanwhile, a delegation of Scottish companies is to visit Myanmar this week in an effort to tap into opportunities in the south east Asian country's oil and gas sector.

The visit comes after Myanmar opened up to international trade and investment following decades of military rule.

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