Energy Secretary: Oil price collapse was ‘surprise’

Industry news
Industry news

Energy Secretary Ed Davey has admitted that the world oil price collapse took him by “surprise” – but insisted the North Sea’s future was not all “doom and gloom”.

He also reassured MPs that the new Aberdeen-based Oil and Gas Authority remained on track to be up and running by April.

The Liberal Democrat minister was giving evidence to Westminster’s energy and climate change committee.

Asked by north-east MP Sir Robert Smith about the impact of the dramatic fall in prices, Mr Davey said: “I take this issue very seriously. We’ve been working across government ever since these changes were made.

“As you know, it’s taken everyone by surprise. The scale of the collapse in the oil price has taken everyone by surprise.”

Mr Davey confirmed that the Budget would be used to try to boost the offshore industry, saying: “Clearly there’s an awful lot of work going on at the Treasury and we’re supporting that work to see what the changes might be.”

He added: “There are things that we can do. Try to get the regulatory approach to be far more long term, far more collaborative in the way that it’s done.

“We can reform the tax system and give really clear signals to investors both here and abroad into the North Sea that this will be an attractive basin for investing.

“But what we cannot do is control the world oil price, and that’s unfortunately or fortunately, depending on your view, something that we have to live with.”

Mr Davey said recent investments in the industry should not be forgotten.

“There have been job losses announced last year and this year, and for the individuals concerned, their families, the communities, of course that is a real worry,” he said.

“But on the other side there has been some job creation. It’s not all doom and gloom in the North Sea.”

Quizzed on whether the Oil and Gas Authority was on track to be operational by April, he said: “I spoke to Andy Samuel (the body’s chief executive) about that in Aberdeen last week. He believes we are.

“I made it clear to him that we’ll give any support that’s needed to meet that.”

For more oil and gas stories click here.

Breaking