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Scotland: Unity needed during oil slump

Scotland calls for energy sector support amid dim prospects for North Sea.

By Daniel J. Graeber
Scotland: Unity needed during oil slump
Scottish energy minister calls for collaborative approach to addressing challenges facing the oil and gas industry. File photo by A.J. Sisco/UPI | License Photo

ABERDEEN, Scotland, Sept. 17 (UPI) -- The Scottish government and industry leaders need to work together to overcome problems facing the energy sector, the Scottish energy minister said.

Nearly 1,000 people attended an energy conference in Aberdeen focused on employment, innovation and improved performance. Scottish Energy Minister Fergus Ewing said its incumbent upon government and industry leaders to work together to overcome current market challenges.

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"There is a shared determination within the industry to collaborate and overcome the challenges currently besetting the industry, which have been exacerbated by the low global oil price," he said in a statement.

Ewing this week called on his British counterparts to make good on commitments to support the oil and gas sector. British regulators expect producers could pull another 22 billion barrels of combined oil and gas out of the North Sea, though the Scottish government has expressed reservations about London's approach.

The Scottish government said in a May letter to British Chancellor George Osborne that the government in London has a chance to "right a wrong" by advancing a more transparent fiscal regime over the regional oil and gas sector.

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Ewing at the time said reforms could stimulate investments by as much as $55 billion and support as many as 26,000 jobs.

Last week, industry body Oil & Gas U.K. said in an annual report new spending in exploration and production is expected to fall by up to $6 billion per year over the next three years for its lowest levels since the 1970s.

Employment in the British energy sector is down about 15 percent since the start of 2014 and the group said the industry will continue to face an uncertain future.

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 and the government in January said the region's energy sector needs a predictable set of governing policies in order to thrive.

An opinion piece in The (Scotland) Herald said it was a fool's errand to put so much emphasis on the issue.

"Scotland is simply not in control of a game that may have serious consequences," it said.

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