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Cameron seeks to woo Scots with oil boost plan
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The British government yesterday promised to make it easier and quicker to unlock hard-to-extract North Sea gas and oil as part of its efforts to persuade Scotland to remain part of the United Kingdom.
Acting on its first review of the industry for two decades, published yesterday, Britain said it would immediately set up a new industry-funded regulator and in future award production licences on the basis of recovering the maximum amount of oil as a whole rather than just from each individual licence block.
The reforms, which will see a push to cut red tape and share infrastructure and geophysical information better, could be worth 200 billion pounds (US$330 billion) in the next two decades and allow the industry to recover 3-4 billion extra barrels, the government said.
The report — drawn up by Ian Wood, former chairman of oil services company Wood Group — said Britain urgently needed its oil and gas companies to pay for a new regulator to encourage industry collaboration and counter plunging production.
The North Sea is thought to contain billions of barrels of oil increasingly difficult to extract, and with many platforms and pipelines coming to the end of their working lives, time is running out to get at them.
“I promise we will continue to use the UK’s broad shoulders to invest in this vital industry,” Prime Minister David Cameron said in a statement.
Visiting an oil platform in Scotland, he said: “Because we’re a top 10 economy we can afford the tax allowances, the investment, the long-term structure that is necessary to make sure we can recover as much from the North Sea as possible and that’s good for everybody.”
The decision will affect operators such as BP, Statoil and Shell, who are expected to foot the bill for the new regulator.
The shake-up, coinciding with Cameron’s first full cabinet meeting in Scotland — symbolically in Aberdeen, the heart of the UK oil industry — has far-reaching ramifications.
Scots will vote on whether to end three centuries of union with England on September 18 and Scotland’s oil and gas industry has featured heavily in a campaign in which pro-independence nationalists trail.
Alex Salmond, the leader of the pro-independence Scottish National Party, argued yesterday that oil and gas policy would be more stable in an independent Scotland and that Scots would benefit more from its riches.
“The reason they (UK politicians) want to hang on to Scotland’s resources is that they’ve done so well out of them for the last 40 years.”
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