Swinney Calls For Oil Reform

The Deputy First Minister urges the Treasury to help

The Scottish Governmemt are calling on the Treasury to support the oil industry

In a letter to the Chancellor ahead of next week's budget The Deputy First minster John Swinney says urgent reform is needed of the oil and gas taxation regime. 

Mr Swinney expresses concern in the letter after the fall in oil prices and a decline in exploration. 

He writes:
"The oil and gas industry makes a valuable contribution to both the Scottish and UK economies and public finances. With the correct fiscal and regulatory framework it will continue to be a significant source of employment and economic activity for decades to come.

Despite the industry’s vast potential, the recent fall in oil prices, coupled with a range of underlying challenges associated with a maturing basin present a number of challenges for the sector. This is reflected in the Oil & Gas UK Activity Survey 2015, which reported a sharp fall in exploration activity and a decline in future investment plans.

We both agree that the sector itself needs to continue to take forward reforms to boost productivity and reduce costs. However, the Scottish Government has consistently called on the UK Government to undertake a fundamental change in the oil and gas fiscal regime. Recent events increase the urgency with which these reforms must be brought forward.

The measures in the Autumn Statement 2014 were viewed by many as insufficient. Budget 2015 provides an opportunity to correct this, and put in place a fiscal regime that is simpler, more transparent, and fit for purpose."