EDINBURGH, Scotland, Jan. 9 (UPI) -- The Scottish government wants reforms in the tax regime of the North Sea oil and gas sector to ensure long-term sustainability, the energy minister said.
Scotland pegged its future during a bid for independence on revenue from oil and gas reserves in the North Sea. The bid failed last year, though Scottish Energy Minister Fergus Ewing said frustration endured in the sector.
"The oil and gas industry is a strong success story for Scotland and will continue to be," he said in a late Thursday statement. "However, because of the mismanagement of oil and gas fiscal policy by the U.K. government, challenges remain and we must tackle the on-going cost pressures and the fall in oil prices head on."
Ewing said the region's energy sector needs a predictable set of governing policies in order to thrive. Tax policies that would make it more expensive to operate in the North Sea are counterproductive, he said.
The minister said reforms must be made to allow for reinvestments in North Sea operations, adding a tax credit for regional exploration would help sustain offshore developments.
Ewing said reforms could stimulate investments by as much as $55 billion and support as many as 26,000 jobs.
"We believe there is a long term sustainable future for the North Sea and we are committed to using every lever at our disposal," he said. "It is time for the U.K. government to follow suit."
Brent crude oil prices, a global benchmark based on North Sea blends, was trading near the $50 mark early Friday. At that point, about 85 percent of new regional offshore developments are at risk of delays, energy consultant group Wood Mackenzie finds.
