North Sea Needs State Investment Fund Says Labour
Scottish Labour has called on the UK Government to create a state-backed investment fund to help the ailing North Sea oil and gas industry.
Scottish Labour has called on the UK Government to create a state-backed investment fund to help the ailing North Sea oil and gas industry.
The party’s leader Kezia Dugdale said that tax cuts “will not go far enough” to protect key North Sea infrastructure, including oil platforms and pipelines.
Instead, the Government “should step in” to invest in North Sea assets through a specially-designed fund, until oil price rises to a level at which they return to financially viability.
Investment in the North Sea is at record lows following a 20-month oil price rout, raising concerns that the decline of the super mature oil and gas basin could accelerate if key platforms and pipelines close sooner than planned.
Ms Dugdale said: “We believe that the UK Government should step in and share the risk when times are tough.
“We need real support to ensure that North Sea assets are not lost because there is a lack of support for investment. Once these assets are gone they are gone for good, with all the benefits they bring to Scotland’s economy. We have to do all we can to stop that happening and then review investment once the oil price rises again.”
Scottish Labour’s full proposal includes the creation a new public body, UK Offshore Investment Limited, to undertake a review of the sector alongside the Oil and Gas Authority to identify those assets which offer long-term viability and profitability.
Based on this “open book” review, the body could commit to a temporary public investment in North Sea assets until the global market price for oil recovers.
Oil prices have already climbed from 12-year lows of $28.50 a barrel in January to around $40 a barrel today, as major oil producing nations continue to take cautious diplomatic steps towards agreeing to manage oil output to help stem the global supply glut.
The Oil and Gas Authority was not immediately available to comment on the party’s proposal
