ROVworld Subsea Information

North Sea Action Call To McConnell
Date: Friday, January 16, 2004 @ 01:40:44 EST

North-east Labour MSP Richard Baker is to quiz First Minister Jack McConnell today in the Scottish Parliament on what action the Scottish Executive is taking to retain oil jobs in the region.

Mr Baker, vice-convener of Holyrood's cross-party oil and gas group, said yesterday he was raising the issue following the Press and Journal's exclusive report last week that almost 300 jobs would be lost at offshore survey company Fugro and oil giant Total in Aberdeen.

His question has been selected to be asked during First Minister's question time in parliament at noon. Mr Baker will also refer to yesterday's report in the P &J in which the UK Offshore Operators' Association said there was a three-year deadline for action to be taken to halt a dramatic decline in North Sea production

He will additionally refer to the sharp fall in exploration and appraisal drilling in the North Sea, which has resulted in many job losses and raised concern about the future of the industry in Scotland.

Along with deputy Enterprise Minister Lewis Macdonald, Mr Baker has met with Graham Tran, the regional officer in Aberdeen at offshore union Amicus, to discuss the job losses, in particular the crisis in the drilling sector. Hundreds of jobs have been cut as a result of a downturn in work, and Amicus has highlighted the fact this could result in a loss of valuable skills to the North Sea.

Speaking yesterday, Mr Baker said: "The recent job losses announced by oil and gas companies show that urgent action is required both from government and operators to retain employment in the industry.

"I hope Jack McConnell will take the opportunity to outline how the executive is working with the UK Government, as well as with operators and trade unions, to address this problem.

"It is vital that companies are encouraged to exploit the assets they have in the North Sea as this is a key issue in maintaining employment in the industry."

He added that his supplementary question would ask what could be done to give newer North Sea operators access to unexplored acreage held by majors such as BP, Shell and Total.

Mr Tran said: "The status quo in terms of the fiscal regime offshore is not an option. We have a number of ideas and intend to work with Richard Baker and his colleagues to ensure that our message is taken to the heart of government."

UKOOA made a presentation to the media in Aberdeen yesterday in which its economics and commercial policy director, Mike Tholen, confirmed that the cost of a North Sea barrel of oil of around 5 could rise to nearer 10 by the end of the decade unless more reserves were found.

That would drive the UK to be a "very uncompetitive basin" and should there be a downturn in oil prices that would be very damaging, he added.

UKOOA's operations policy director, Paul Dymond, is about to lead a study on "brown" (producing) fields. The trade body believes fiscal incentives for oil and gas operators to invest more could result very quickly in more production - and more revenue for the Treasury. He said the Treasury had already indicated it would be prepared to look positively at the results of the study.

Steve Harris, the group's acting director general, said the industry was not yet in crisis, and there was still a window of opportunity to continue at a high level of business for years to come, adding however, that there were issues to be considered urgently.

Source: The Press & Journal

This article comes from ROVworld Subsea Information

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