More than half of the value of North Sea oil and gas reserves is yet to be extracted – representing an asset with a potential wholesale value of a trillion pounds – Alex Salmond said as he urged the UK Chancellor to deliver long-term stability in the tax regime to support maximum recovery by the industry.
Mr Salmond in an address to an SCDI Oil & Gas conference, welcomed the fact the UK Government is now working with the industry on options for reform of the tax regime, following the Chancellor’s unexpected and damaging announcement in last year’s Budget of a hike in the supplementary charge paid by North Sea operators.
The First Minister said: “The industry is a huge success story, and the key message from this year’s conference is that there is still much more to come.
“I welcome the fact the UK Government is now working with the industry on options for reform. It is in everyone’s interests for the oil taxation system to be incentivising, stable and fair and I urge the Chancellor to ensure that next month’s Budget delivers long-term stability, certainty and confidence across the industry.”
Oil and Gas production now contributes £32 billion to the UK’s balance of payments, with the supply chain adding a further £5-6 billion – more than halving the UK’s trade deficit. The industry supports almost 200,000 jobs in Scotland and has generated almost £300 billion, at today’s prices, in taxation revenues.