Decommissioning support could boost the value of older fields by 50%.

The UK Government must meet its obligations to the oil and gas industry if the sector is to continue to overcome the prolonged period of subdued prices, Minister for Business, Innovation and Energy Paul Wheelhouse will warn on a trip to the North East today.

Scottish Government analysis of fields already nearing decommissioning has identified that the remaining value of these assets could increase by more than 50%, or almost half a billion pounds, if there were successful measures to reduce costs and increase production. This could also have future benefits for other fields that are currently in earlier stages of their production cycle.

Mr Wheelhouse underlined the figure as part of a two-day visit to Aberdeen to co-chair the Oil and Gas Industry Leadership Group and meet with oil and gas companies. He will discuss a range of topics including decommissioning, developing international opportunities and supporting exploration.

The Scottish Government has called for the Chancellor’s Autumn Statement to include measures that widen access to decommissioning tax relief. Mr Wheelhouse has also highlighted that – nine months after the UK Government’s March Budget – there has been no action on the commitment to use loan guarantees to support infrastructure investment, which could help the sector access a further two billion barrels of oil and gas.

Mr Wheelhouse said:

“The UK Government retains control of the key taxation levers affecting the sector and must take the action needed to protect businesses and jobs.

“Last week’s Decommissioning Insight report from Oil and Gas UK highlighted the £17.6 billion decommissioning opportunity over the next ten years and the need for HM Treasury to work with the industry to attract fresh investment, avoid premature decommissioning, and ensure decommissioning is carried out in a timely and cost-effective manner.

“The Chancellor’s Autumn Statement presents an ideal opportunity to offer the industry the support and clarity it deserves. The UK Government must provide support in widening access to decommissioning tax relief to ensure that the full potential of late-life assets can be realised.

“To illustrate the potential opportunities, Scottish Government analysis of fields nearing decommissioning has identified that the remaining value of these assets could increase by over 50%, or almost half a billion pounds, if there were successful measures to reduce costs and increase production.

“The UK Government should also reaffirm its commitment to provide loan guarantees to the sector, which could be important for unlocking capital investment and stimulating investment. This is of vital importance to the supply chain, which is being hardest hit by the recent slowdown and requires immediate support.

“Scottish Government analysis has identified 45 unsanctioned potentially commercial fields within the North Sea with the potential to unlock around two billion barrels of oil and gas, however this will require around £39 billion in capital expenditure.

“Without greater investment and activity we risk losing vital capacity and skills that will support production and ensure we maximise economic recovery from the North Sea. The Scottish Government believes the oil and gas industry can have a bright future. The Scottish Government is taking action where we can to help the industry, but the Chancellor must also step up to the plate and do all that he can to support the sector.”

Background

The Scottish Government has called for the Chancellor’s Autumn Statement to include measures that:

Improve access to decommissioning tax relief

In order to achieve the tripartite commitment to Maximise Economic Recovery from the North Sea, it is essential that assets are in the right hands and there are no barriers to late life asset transfers. This is of particular significance when fields are maturing and opportunities exist for companies with a competitive advantage or focus in operating late-life assets to assume ownership. The UK Government should take steps in the Autumn Statement to allow the transfer of corporate tax history along with the transfer of an asset and associated commissioning liability to close the value gap that exists between a seller and potential buyer. Addressing fiscal barriers to asset transfers could extend field life and reduce decommissioning costs – both of which will have a positive impact on exchequer revenues.

Urgent clarity on the use of loan guarantees

Nine months on from the announcement at the March 2016 Budget, there is now a pressing need for the UK Government to work directly with the industry to agree and deliver loan guarantees for critical offshore infrastructure. The Cabinet Secretary for Economy, Jobs and Fair Work previously met with HM Treasury in June 2016 to discuss delays to this process, and while receiving assurances that plans will be developed, nothing has yet materialised at this critical time for the industry.

Measures to stimulate exploration

With exploration levels currently at record lows, with only 16 exploration and appraisal wells in the first three quarters of the year, the UK Government should consider further action to stimulate exploration activity. The Scottish Government have previously called on policy changes – such as the introduction of an Exploration Tax Credit (ETC) or reforms to the Investment Allowance (IA) to widen eligibility for unsuccessful exploration. I also understand the UK Government has shown a lack of progress on proposals put forward by the industry itself.

ARTICLE SOURCE: http://news.gov.scot/news/uk-chancellor-challenged-to-step-up-for-north-sea

RELATED LINKS:
SCOT GOV WEBSITE >> www.scotland.gov.uk

Scotland is to benefit from significant EU funds

Investment for vital projects to tackle poverty and inequality.

Councils across Scotland are set to benefit from almost £13m of funding to tackle poverty in communities across the country.

The money, made up from a combination of £5m of European Social Funds (ESF) and match funding from local authorities, will be targeted to projects that combat poverty and promote equal opportunity.

The First Minister made the announcement as she visited Project Search, an initiative delivered by the local authority in Renfrewshire designed to get young people with autism and learning disabilities into employment.

Speaking during the visit, the First Minister said:

“This government’s clear focus on tackling inequality is at the forefront of all we do, and this funding will play a hugely important part in our efforts to eradicate it from Scotland’s communities.

“In Renfrewshire alone ESF is providing nearly £400,000 which, when matched by funding from the local authority will come to around £1m. This will benefit a range of projects and provide much-needed support in areas such as debt management, childcare and housing support, and well-being services.

“Project Search is an excellent example of how the money is being invested in traineeships to get people into work.

“This is another example of how our membership of the EU has a real and lasting impact on the lives of Scots from every walk of life.

“We are working hard to ensure we continue to remain within Europe to enjoy these hugely vital and worthwhile initiatives.”

Kieran Kelly, who attended Project Search and went on to secure a job at a charity that tackles disability hate crime, said:

“The experience I had with Project SEARCH overall has been life changing. The work experience that I had has given me new experiences to learn new skills and allowed me to do things I have never done before. The classes were really interesting and fun and gave me the confidence to try new things.’

Renfrewshire Council Leader Mark Macmillan said: “Renfrewshire’s Project Search is about helping our young people to harness their talent, achieve their potential and find the sustained employment that changes lives. “It is a clear example of a successful programme making a real difference on the ground and part of our innovative approach to tackling poverty. “By equipping young people with the skills and experience they need to thrive in the workplace, we are giving them a solid foundation for long-term employment and making it less likely they will face financial hardship. “It also helps employers by ensuring that our area has a pool of people they can draw on to help their businesses prosper and grow.”

Article Source: http://news.gov.scot/news/scotland-to-benefit-from-significant-eu-funds

RELATED LINKS:
SCOT GOV WEBSITE >> www.scotland.gov.uk

Keith Brown calls for parliamentary consensus over single market membership.

Article Source: http://news.gov.scot/news/scotland-must-remain-in-eu-single-market

Cabinet Secretary for Economy and Fair Work, Keith Brown, will call for the Scottish Parliament to unanimously back Scotland’s continued membership of the EU single market at a debate in Holyrood later this week.

Speaking ahead of the debate, Mr Brown said:

“The people of Scotland voted overwhelmingly to remain within the European Union, and it is vital that any Brexit negotiation acknowledges and respects that choice.

“This is why I am asking the Scottish Parliament to show consensus on this issue, so we can unanimously call on the UK Government to explore all avenues to protect this access, rather than dragging Scotland out against our will.

“The EU is a vital trading body for Scotland. It’s the destination for 42% of our exports, is a market nine times bigger than the UK’s alone, contains eight of our top 12 export destinations and contributed £11.6 billion to the economy in 2014.

“The benefits of remaining within this market are clear – Scotland is currently the most attractive region outside of London for overseas inward investment, and maintaining a pathway to the single market is a key factor for many international companies who choose to base themselves here.

“Removing Scotland from the single market would also put at risk the free movement of EU citizens, which has been a key driver of growth in Scotland, bringing in new skills and expertise and diversifying our culture and economy.

“Additionally, Scotland benefits significantly from EU funding, which supports jobs and infrastructure, sustains rural communities, provides valuable support for the farming and fishing industries and delivers research funding for universities.

“Cutting ties with the EU single market would seriously threaten Scotland’s attractiveness as a place to do business, remove several vital streams of funding, and endanger the security of jobs, businesses and services across the country.

“That is why it is essential that this week our national Parliament sends as united a message as possible that Scotland must remain in the single market.”

RELATED LINKS:
SCOT GOV WEBSITE >> www.scotland.gov.uk

Speech By Nicola Sturgeon on 08/16:

First Minister confirms Lord Advocate will lead intervention.

The First Minister has confirmed that the Lord Advocate will lodge a formal application to intervene in the UK Government’s appeal to the Supreme Court on the triggering of Article 50.

The Lord Advocate – Scotland’s most senior law officer – will lodge the application as soon as the UK Government lodges its appeal against a High Court ruling preventing them from using the Royal Prerogative to begin the process of the UK leaving the European Union.

The outcome of the High Court’s decision is that the UK Government must seek the permission of the UK Parliament before it can trigger Article 50. The Scottish Government believes that the Scottish Parliament should also be formally consulted.

The First Minister said:

“The Scottish Government is clear that triggering Article 50 will directly affect devolved interests and rights in Scotland.

“And triggering Article 50 will inevitably deprive Scottish people and Scottish businesses of rights and freedoms which they currently enjoy.

“It simply cannot be right that those rights can be removed by the UK Government on the say-so of a Prime Minister without parliamentary debate, scrutiny or consent.

“So legislation should be required at Westminster and the consent of the Scottish Parliament should be sought before Article 50 is triggered.

“Let me be clear – I recognise and respect the right of England and Wales to leave the European Union.

“This is not an attempt to veto that process.

“But the democratic wishes of the people of Scotland and the national Parliament of Scotland cannot be brushed aside as if they do not matter.

“The Prime Minister said that on June 23 people across the UK had voted with, in her words, “emphatic clarity” when they voted by a margin of 4 points to leave the EU.

“The margin for remain in Scotland was 24 points: a far more emphatic and clear result.

“So the Prime Minister needs to live up to her promise to treat Scotland as an equal partner in the United Kingdom and listen to the will of the people of Scotland.”

The First Minister’s full speech can be found here: http://news.gov.scot/speeches-and-briefings/first-ministers-press-conference-1

ARTICLE SOURCE: http://news.gov.scot/news/scottish-government-will-intervene-in-article-50-legal-case

Article by Nicola Sturgeon via Scot Gov News 06/11/16:

First Minister makes the case for new UK economic policy.

The UK Government must reverse its austerity policies and give people more grounds for hope, First Minister Nicola Sturgeon will say tomorrow.

In a major speech in Sheffield, the First Minister will challenge the UK government to address some of the underlying causes of the vote to leave the European Union.

Ms Sturgeon will speak at the Sheffield Political Economy Research Institute, on “Scotland and the UK: economic policy after the EU referendum” and will tell a sold-out audience of 1200 people that the vote to leave the European Union was also a vote against the damage done by the austerity policies of the UK Government.

In a major anti-austerity speech, the First Minister will set out an alternative economic policy and urge the Chancellor to support inclusive growth, to invest in jobs and to back our public services.

Setting out the need to learn the lessons of the EU referendum result and to invest in inclusive growth, Ms Sturgeon will say that:

“We need to demonstrate that being open to free trade and free movement isn’t just good for the economy as a whole. It benefits individuals and communities too. It creates, rather than curtails new opportunities for everyone. And it can lead to a society which is more prosperous, more inclusive, and more cohesive.”

“Austerity has already caused huge social harm and brought no economic benefit – it has failed, categorically and comprehensively, on its own terms.

“We know that people on low incomes were more likely to vote to leave the European Union, as were areas with low employment rates. UK economic policy has just not given enough people, enough grounds for hope.

“While the UK Government may have abandoned its original debt reduction target, the pain for working people is set still continue – the Resolution Foundation estimates working families on low incomes will be worse off in the years ahead as a direct result of both austerity and Brexit.

“So the Chancellor of the Exchequer needs to change course in his Autumn Statement in a fortnight to invest in the economy and support public services, offering hope for the future rather than playing on the fears of the present.”

ARTICLE SOURCE: http://news.gov.scot/news/time-to-end-austerity

RELATED LINKS:
SCOT GOV WEBSITE >> www.scotland.gov.uk
SNP WEBSITE: >> www.snp.org

Nicola Sturgeon has welcomed as “hugely significant” a court ruling that parliament must vote before the UK can start the process of leaving the EU and triggering Article 50.

The First minister also said the Scottish government was considering become an active participant in the case.

The ruling by the High Court means the UK government cannot trigger Article 50 of the Lisbon Treaty – beginning formal exit negotiations with the EU – on its own.

It is appealing to the Supreme Court, with a further hearing due next month.

The case, which was heard by three judges, is widely regarded as being one of the most important constitutional rulings in generations.

Article Source: http://www.bbc.co.uk/news/uk-scotland-37859595

The Scottish government had instructed legal representatives to observe the proceedings, but was not directly involved.

Parliament backs fairer council tax

Support for legislation that will raise funding for schools.
ARTICLE VIA: http://news.gov.scot/news/parliament-backs-fairer-council-tax

The Scottish Parliament has approved legislation that will protect household incomes, make local taxation fairer and that paves the way for an additional £500 million to be invested in education over this parliament.

The overwhelming vote in favour of the council tax order is the first step in the process of reforming council tax with the Scottish Government committing to further discussions on fair and progressive taxation over this Parliament.

Speaking after the vote Cabinet Secretary for Finance and the Constitution Derek Mackay said:

“The steps we have taken today pave the way for additional investment in schools right across Scotland to help close the attainment gap and are the first step in a journey of reform to make local taxation fairer.

“Our changes also make council tax more progressive and ensure that three quarters of households will see no rise in their bills as a result of these reforms.

“In fact our reforms ensure that while those who can afford to pay more will rightly see a moderate increase in their bills, all households will pay less on average than under council tax regimes in England, and less than they would have done if the Scottish Government’s council tax freeze had not been in place.

“This is a significant step for Parliament and will enable us to significantly increase investment in Scotland’s schools.

“It is disappointing that Parliament failed to support steps to ensure that any future reforms are based on the principle of fair and progressive taxation, but this government will remain committed to that principle.”

Background

The Scottish Parliament approved the Council Tax (Substitution of Proportion) (Scotland) Order 2016.

More information on the council tax plans is available at: http://news.gov.scot/news/council-tax-reform