Published in Oil Industry News on Tuesday, 21 February 2017
Scottish Labour is to demand crisis-hit North Sea oil platforms are nationalised in a move that could cost taxpayers millions of pounds.
The party is expected to call for the state to step in by bringing key assets into temporary public ownership to prevent oil and gas reserves being “turned off prematurely”.
More than 100,000 workers in the sector are feared to have lost their jobs following the collapse in prices.
A motion to be discussed at the Scottish Labour conference in Perth on Friday urges both Holyrood and Westminster to “agree a co-investment plan to support the industry, taking a public stake where necessary, to protect vital offshore infrastructure”.
The motion, which has been put forward by the Aberdeen South and North Kincardine branch, also calls for action from ministers to “maximise the opportunities from future decommissioning”.
The Treasury put £24million more into investment and decommissioning than it got back in petroleum revenue tax (PRT) in 2015/16.This could see both platforms and pipelines bought up and brought under state control.
It is the first time the oil balance sheet has been in the red since records began in 1968/69.
Labour North East MSP Lewis Macdonald claimed the party had put “forward a positive plan to secure the future of our oil and gas industry”.
He said: “By supporting this motion, Scottish Labour will reaffirm its commitment to protecting the north-east’s reputation as the energy capital of Europe.
Government intervention could ensure that the North Sea taps are not turned off prematurely.
“As well as protecting the jobs of today, we will also fight to ensure Scotland has a comprehensive decommissioning strategy so the North Sea can continue to deliver jobs for the next generation.”
Mr Macdonald said his party’s stance is “in contrast to the SNP and the Tories, who have been all at sea in their response to the oil price downturn”.
A spokesman for the UK Government’s Department for Business, Energy and Industrial Strategy said: “We’ve already provided extensive support in response to falling oil prices through a £2.3billion package of measures, and committed £40million to new seismic studies to help uncover more opportunities.
“This was only made possible because of the broad shoulders of the wider UK economy.”
A spokesman for Scottish Energy Minister Paul Wheelhouse said: “Labour are also talking nonsense on the issue of Scottish Government support for workers affected by the oil industry downturn.
“Our Transition Training Fund has already directly supported over 1,500 individuals made redundant, in addition to more than 700 further individuals being helped through two formal training procurement rounds.”
But Scottish Tory energy spokesman Alexander Burnett dismissed the plan as “a ludicrous suggestion”.
He added: “Not only have they made no mention of how they would pay for such a policy, it’s clear that this is not the best way to support the oil and gas industry.
“The UK Government has already granted significant tax breaks to the companies working in Aberdeen and in the North Sea, allowances which should enable further exploration and investment, and see companies hold onto more workers through this difficult time.”
Meanwhile, Mike Tholen of trade body Oil and Gas UK told MPs the industry is holding its head “above water” after last year’s losses.
Giving evidence to the Commons Scottish affairs committee he added: “Hopefully we will be a positive taxpayer this coming year, and for years to come.”
But he warned the price of oil could remain at about US$50 (£40) per barrel “perhaps for many years to come”.