U.K. Makes Joint Investment in Oil and Gas Region
United Kingdom Prime Minister David Cameron announced Thursday that the Scottish and U.K. governments would jointly invest $700 million in Aberdeen, Scotland, an area vital to the country’s North Sea oil and gas industry. The program will be funded equally between the two governments and will be administered in partnership with local authorities. It comes in addition to a $30 million package for oil and gas industry innovation and diversification.
As of September 2015, the BBC reported that the country's oil and gas sector had lost about 65,000 jobs.
“I know it's a very tough time for people who work in the industry and their families, and I am determined that the UK government will do what it can to support them,” Secretary of State for Scotland David Mundell said in a statement.
The deal will create a new energy innovation center to provide assistance to the sector, and will help expand Aberdeen's harbor to accommodate larger vessels.
Scottish Secretary of State David Mundell said that “oil and gas is a crucial sector, not just for the North East of Scotland but for the whole of the U.K. We need action to help in the short, medium and long-terms . . . helping the UK's oil and gas industry to export its world-class expertise around the globe; and encouraging diversification of the economy to create new opportunities in other sectors too."
In 2015, Chancellor George Osborne announced a Petroleum Revenue Tax cut from 50 percent to 35 percent in order to help the struggling sector, plus a cut in a supplementary tax; between the two measures, he said that U.K. oil and gas firms could expect $1.9 billion in tax relief. That package also included $30 million for seismic surveying for purposes of boosting future offshore projects.
The deals follow on an earlier relief package for Glasgow of $1.4 billion.
Earlier in January, Prime Minister Cameron said that the region's oil and gas industry was better off with support from the “broad shoulders of the U.K.,” suggesting that its situation would be worse if Scotland had approved an independence referendum in 2014.
“I think it does make the case for the U.K., as we said during that referendum campaign, that North Sea oil is better off with the broad shoulders of the U.K. being able to stand behind it, because you never know whether the oil price is going to be over 100 dollars or, as it is today, around 50 dollars,” he said.