Press release

PM announces further boost for UK oil and gas industry

Visiting Aberdeen today, the Prime Minister has reaffirmed the UK Government’s ongoing commitment to the UK’s oil and gas industry.

Visiting Aberdeen today, the Prime Minister has reaffirmed the UK Government’s ongoing commitment to the UK’s oil and gas industry.

In addition to a £250m UK City Deal signed earlier in the day, the PM has set out an action plan of further measures to help build a bridge to the future for the industry, which is vital for our energy security and has been at the heart of the UK economy for decades, generating jobs, skills and growth.

The UK Government is backing our oil and gas industry and has taken forward the rapid implementation of the Wood Review and the Oil and Gas Fiscal Review, establishing the Oil and Gas Authority and taking action to help revitalise exploration. The Oil and Gas Authority is driving greater collaboration and productivity in the industry, attracting investment, creating jobs and helping it to remain competitive for the future.

The UK Government has also introduced a £1.3bn package of tax measures for the oil and gas industry to ensure the UK Continental Shelf remains an attractive destination for investment and safeguard the future of this vital national asset.

And earlier today, a major new injection of cash into North East Scotland’s economy was confirmed with the signing of a new £250m UK City Deal, jointly funded by the UK and Scottish Governments.

But the Prime Minister has now announced that we are going further. Speaking in Aberdeen this afternoon, he set out further action from the UK Government to boost our oil and gas industry by backing the export of our world class skills in oil and gas and diversifying the economy of the North East of Scotland, including a £20m package of investment in exploration, innovation and skills.

Amongst the additional measures he has announced are:

  • £20m of new funding for a second round of new seismic surveys to unlock new exploration activity on the UK Continental Shelf (UKCS), which is the lifeblood of the basin. To back genuine innovation, the data will be made publically available, with £1m allocated to award innovative use of data to unlock new fields. This additional investment will also help to accelerate drilling new wells, replenishing our reserves and leading to new infrastructure projects. Further details will be announced shortly.

  • An Oil and Gas Ambassador will be appointed to help ensure the best possible access for UK companies to markets overseas, promote the North Sea around the world and boost inward investment. We will be ambitious with our expectations, and will set a challenging export target in partnership with the UK oil and gas industry.

To support vital new growth opportunities in the UKCS, he also set out how:

  • As decommissioning is a fact of life in a mature basin, the Oil and Gas Authority will publish a UKCS Decommissioning plan by the early summer, that will enable the £15bn Aberdeen service sector to become the centre of a new global market for decommissioning and help UK firms to be ready to capitalise on the huge opportunities that are coming in the years ahead. This will be supported by the Natural Environment Research Council who are investing up to £1m in new projects to support the development of expertise in the UK on decommissioning and its environmental management.

  • The UK Government is today setting out a new strategy to maximise the economic recovery of offshore oil and gas in the UK (MER UK strategy). This will help to get more value from the UKCS through better collaboration between companies and improved cost-efficiency. It will deliver the Oil and Gas Authority’s mandate, setting out how it will manage the basin over the long-term, and make the most of the remaining UKCS.

  • Innovate UK is launching an “Energy Game Changer” which will make £1.5m available for innovators - micro businesses and SMEs from outside the energy sector - to come up with radical solutions and disruptive technologies in response to challenges set by the energy industry. These include challenges set by the oil and gas sector in areas like monitoring corrosion under installation, vessel inspection and use of sensors and data.

Highlighting the Government’s commitment to investing in the skills and workforce of the future, the PM also set out that:

  • £700K will be invested in the development of world class 3D Visualisation facilities at Lyell Centre at Heriot Watt University in Edinburgh

  • The Natural Environment Research Council is allocating an additional £1m investment in the successful Oil and Gas Centre for Doctoral Training led by Heriot Watt University in Edinburgh and with Aberdeen University as another core partner. This further investment will enable the programme to be extended for a further year and take the total number of PhD students funded under this scheme to 120 by 2017.

Secretary of State for Energy and Climate Change Amber Rudd said:

The UK Government is backing our oil and gas industry, the hardworking people it employs and the families it supports.

We’re stepping in to provide the extra support needed now with £20m of funding for seismic exploration to help industry find new oil and gas reserves. But we’re also determined to build a bridge to the future and make sure the expertise we hold in areas such as decommissioning can become a UK success story, boosting our economy, supporting jobs and creating more financial security for families.

Today’s announcements come on the back of the news from oil and gas operator Total that it plans to start drilling an exploration well on a prospect named Sween, located to the east of the Shetland Islands, later this year.

Commenting on the announcement, Amber Rudd said:

I welcome the news from Total that it will be drilling a new exploration well later this year. This shows the North Sea is open for business and this Government is clear that the broad shoulders of the UK are firmly behind it”.

Notes to Editors

  • A new Ministerial group on Oil and Gas, chaired by Energy and Climate Change Secretary Amber Rudd, has been set up to reiterate the UK Government’s commitment to supporting the oil and gas industry and those who work in it. The group will coordinate the UK’s response to the oil price and focus on vital issues such as exports, skills and investment.

  • The Group met for the first time on Wednesday 27 January. It agreed to produce a UK Oil and Gas workforce plan in the spring. This will focus on what steps the Government will take to support those who may lose their jobs in the oil and gas sector, and set out how Government and industry can help these skilled workers move into other sectors, including other energy related infrastructure projects.

  • The new MER UK strategy is published today and can be found at: https://www.gov.uk/government/publications/maximising-economic-recovery-of-uk-petroleum-the-draft-mer-uk-strategy