New exploration in the North Sea will be supported by a £5 million UK government fund for 2018/19, Philip Hammond announced during a visit to Aberdeen and Dundee. The funding will be used by the Oil and Gas Authority (OGA) to survey under-explored areas of the UK Continental Shelf to find potential new deposits.

Importance of the oil and gas industry

The announcement came on the same day that the Oil & Gas Technology Centre in Aberdeen, which the Chancellor visited and is part-funded by the UK government, said its work with industry on new subsea technologies could help unlock 400 million additional barrels of oil and gas from the North Sea and £3 billion of additional value to the industry.Chancellor of the Exchequer, Philip Hammond, said, “The oil and gas industry remains vital for the Scottish economy and the UK as a whole.“The £5 million funding I am announcing will help exploration to find potential new deposits, and boost prospects for jobs in Aberdeen and the surrounding area. “This continues the UK government’s extensive package of tax and funding support for the industry and the wider Scottish economy.“I’ve seen today how Dundee has benefitted from our life sciences and creative sector funding. I now look forward to progress being made on the Tay Cities Deal, which will follow the £1 billion already committed by the UK to Scotland’s City Deals so far.“This government will continue using the UK’s broad shoulders to provide Scotland with the skills and support it needs to thrive in the future.”UK Energy Minister, Richard Harrington, said, “North Sea oil will continue to fuel growth and jobs across Scotland and the rest of the UK, with an estimated 10-20 billion barrels still remaining.“I was in Aberdeen last month and saw first-hand the work of the Oil and Gas Authority which we established to be a strong, independent regulator focused on maximising economic recovery.In Aberdeen, the Chancellor met oil and gas industry representatives to discuss how the £5 million funding could help employment and the economy in the region. The UK government has given support to the oil and gas sector, including a £1.3 billion package of tax cuts at Budget 2015 and a further £1 billion package at Budget 2016. 

Aberdeen as leader in decommissioning 

The UK government is also backing plans to establish Aberdeen as a global leader in decommissioning, creating skilled jobs and exporting this advanced knowledge to other countries. Tax relief for decommissioning is in place, covering around 40 per cent of the total cost for UK companies and forecast to be worth around £24 billion between now and the 2050s. The OGA has also committed to reduce the overall costs for industry.

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Deirdre Michie, chief executive of Oil & Gas UK chief executive said, “It’s good to see the Chancellor here in Aberdeen. His visit sends a strong message of support for industry and his funding announcement to help stimulate exploration – that has been particularly hard hit by the downturn – is a welcome boost.“The UK Government has already made some positive changes to our fiscal regime which have helped reposition the basin as globally competitive.“Building on this, we need HM Treasury to maintain its commitment to the driving investment plan and also enable transferable tax history in the Autumn Budget, which we believe will further unlock the transfer market for late-life assets, encourage more investment, and delay decommissioning for as long as possible with the associated benefit to the Exchequer and the UK.“We are also seeking a strong partnership with Government to support our world-class supply chain and help it capture a greater share of the export market.“This is an industry that makes an extraordinary contribution to the UK economy – helping meet our energy needs, making an estimated contribution of £17 billion to the UK’s balance of trade and supporting 300,000 jobs across the UK. Our supply chain also exports almost £12 billion exports of goods and services around the globe. “With the right support from Government, and a relentless focus on efficiency from industry, we can maximise our domestic resources, while anchoring our supply chain here in the UK for the long-term.”For related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit  

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