Oil and gas production in Scotland has increased by more than a fifth in the last year as sales value has plunged, latest Scottish Government statistics have shown.

In the financial year 2015-2016, the sales value of Scotland’s oil and gas was £13.4bn, a decline of 23.4% compared to the previous year.

Due to low oil and gas prices, companies are having to extract a greater quantity of the materials in an attempt to bridge the loss in revenues.

The statistics also show investment in the industry is down with capital expenditure on oil and gas fields in Scotland falling by 17.6% over the last year.

The Scottish Government said the industry is having a “difficult time”.

Economy minister Keith Brown said on Wednesday: “Although this remains a difficult time for the industry and its workforce, it is encouraging to note this increase in production as the industry adapts to the current period of low prices.

“Capital investment on oil and gas fields in Scottish waters was £10.2bn and the approximate sales value of oil and gas produced in Scotland is estimated to be £13.4bn.

“The UK Government retains control of the main economic and tax levers affecting the North Sea oil industry, though the Scottish Government continues to do all that it can to support the industry, including setting up the Energy Jobs Taskforce that meets today for the 11th time in Aberdeen.

“Our support also includes £24.5m for increased innovation and business-support measures and the £12m transition training fund, which offers grants to individuals to support their redeployment through retraining or further education”.

Brown belives the sector can have a “bright future” but it requires effort from both governments and the industry.

The Scottish Conservatives said the growth in production levels is due to tax cuts made in the last budget by then-Chancellor George Osborne.

Osborne cut the rate of petroleum revenue tax and oil supplementary tax .

The party’s shadow finance secretary Murdo Fraser said: “When the oil industry needed help, the UK Government stepped in to provide significant tax breaks.

“We are now seeing that tactic work, as production rose directly after the measures were introduced.

“Of course much more needs to be done, and these breaks ought to continue having a beneficial impact on the North Sea.

“However, with prices remaining low across the globe, it is an industry which remains under immense pressure.

Fraser added: “Fortunately, the strength of the UK economy is able to absorb this nosedive, meaning public spending can be protected.

“If the SNP had its way, with sales at such a low level and therefore tax receipts declining, an independent Scotland would be very much feeling the heat.”

Source: stv.tv