Date lodged: 14 December 2017
To ask the Scottish Government what action it is taking to support the recovery of the oil and gas industry in Aberdeen and surrounding area.
Answered by: Paul Wheelhouse 21 December 2017
While the regulatory fiscal and legislative process in respect of the industry are reserved to Westminster and UK Ministers, a recognition of the industry’s importance to our energy mix and economy, The Scottish Government has strongly supported the sector during the recent period of challenging prices and the associated downturn in exploration and development work this has caused. Through the Energy Jobs Task Force we have developed a number of interventions to support the sector, augmenting the pre-existing work of the oil and gas team within Scottish Enterprise and Highlands and Islands Enterprise. These interventions include support for workers, in the form of the Transition Training Fund, and we have provided a further £12.5 million to support innovation and business resilience; this specific support is available to business operating in the oil and gas sector across Scotland, including the North East. This included £10 million of SE funding to help firms take forward vital research & development to support innovation and improved productivity. To date around 111 innovation projects with a total project value of around £43 million have benefited from increased funding of around £16 million of SG support so far; we have also provided targeted support for business resilience reviews from industry experts, with over £2.5 million investment committed to this at the time of writing.
In addition, the Scottish Government and the UK Government have committed to investing on a 50:50 basis to support the development of an £180 million Oil & Gas Technology Centre (OGTC) through the £250 million Aberdeen City Region Deal. This is now underway and is making great progress on a path to become a new, world class centre to support innovation of the oil and gas industry in the North East, the rest of Scotland and across the whole of the UK.
The Autumn Budget included a commitment to make transferable tax histories available for North Sea Assets from November 2018 to facilitate the transfer of late life asset transfers, expanding access to decommissioning tax relief to new entrants. The Scottish Government has led the call for all UKCS fiscal reforms in recent years, including on this measure given that essential reforms have often lagged and delayed investment in the sector. While the transfer of tax histories is a positive step, we have been calling for this since the Autumn Statement 2015 and we remain of the view that Loan Guarantees commitments need to be fulfilled.