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Oil Prices (North Sea)

Volume 592: debated on Thursday 5 February 2015

Oil companies around the world are reacting to the rapid fall in oil prices and prioritising activity. We are working to ensure that we deliver maximum economic extraction from the North sea. I will be travelling to Aberdeen later today to discuss that with the industry.

It does seem that others are doing things around the world, but this Government are doing very little. The Energy Minister did not reply to this; he is posted missing on it. He was also posted missing at the summit in Aberdeen. At that summit, the point was made that the two things that are required are investment tax write-offs, so that people continue to invest in future fields, which will stop if they do not continue to invest; and a reduction in the taxation on the fields, which the Government increased massively to 30%. If we bring the tax back down to 20% and put in tax investment, we might sustain this field—this week, Shell announced that it is closing the Brent field, the first field to bring oil into this country from the North sea.

Work of a collaborative tone to support maximum extraction from the North sea might be more appropriate considering some of the inaccuracies in the question. Not only did we take measures in last year’s autumn statement to support oil companies to ensure the maximum extraction, but we are looking at what further we can do in the Budget. The Secretary of State was in Aberdeen last month, and I will be in Aberdeen later today. We are taking this action to support the maximum possible extraction in terms of economic ability from the North sea.

I am glad the Minister will finally make his way to Aberdeen, and while he is there I hope he will have discussions with all aspects of the industry and the trade unions. I have two asks of him when he is in Aberdeen. One is to talk about what will happen to replace the jobs that have been lost—in one week, 600 jobs, and over the piece it is now into the thousands in one geographic area, if we can imagine that. I wonder what the reaction would be elsewhere. The second ask is to make sure that investment continues, even though we know the industry has to squeeze costs out of the supply chain, so that when the price of oil does pick up the industry has not been decimated.

These are good questions and they were being discussed even before the oil price fell. It is very important that we come to the best possible answer, but I think the hon. Lady and I would agree that it is far better that we sustain a strong industry through these challenges in Aberdeen—which we can do because we have a whole-of-the-UK balance sheet off which we can take decisions to support Aberdeen.