Nicola Sturgeon will visit Aberdeen today to announce a new multi-million pound decommissioning fund for the North Sea.
The First Minister is poised to announce an initial £5million to boost the sector in the form of a Decommissioning Challenge Fund (DCF)- with the promise of more funds to come in future years.
She is expected to make the announcement as she tours supply chain company Sparrows and exploration technology specialists Zilift Ltd in the Granite City today.
Speaking to the Press and Journal, Ms Sturgeon reaffirmed her government’s commitment to the North Sea saying that with billions of barrels remaining the sector remained its “top priority”.
The initial £5million is expected to be used to improve capacity at Scottish ports and support infrastructure upgrades and innovation in salvage and transport methods.
The announcement is part of a twin boost announced for the industry- with BP chief executive Bob Dudley vowing to create more jobs in the North Sea which he dubbed their “heartland”.
The pledge from Mr Dudley was delivered as the operator posted a headline profit of $115million for 2016 – a substantial improvement on 2015’s $6.5billion loss.
He said that the firm remained “very bullish” on the North Sea and said there investment of billions of dollars over the last decade showed “nothing but commitment”.
The SNP leader arrived in Aberdeen amid speculation that the nationalists were preparing for the next Scottish independence referendum which could be held as early as August 2018.
City council chiefs last night alleged that Ms Sturgeon had snubbed a meeting with them over rising anger in the region over a potential “crippling” rise in business rates.
But announcing the fund, the Holyrood administration promised to “work closely with industry, local authorities and stakeholders” to explore opportunities.
Ms Sturgeon added that the new fund, alongside the Decommissioning Action Plan, launched by Scottish Enterprise and Highlands and Islands Enterprise last year, will help Scotland’s oil and gas sector make the most of decommissioning opportunities “at home and abroad”.
She said: “With up to 20 billion barrels of oil and gas remaining, the Scottish Government’s top priority remains working with industry and stakeholders to maximise economic recovery from the North Sea.
“The new £5million fund also recognises that decommissioning is an emerging, but growing, activity in the North Sea, with £17.6billion expected to be spent in the North Sea over the next decade.
“Scottish-based firms are already seizing opportunities, securing the lion’s share of value from a range of decommissioning activities, including project management of decommissioning programmes and high value well plugging and abandonment activity.
“This fund builds on the programme for government commitment to identify investment opportunities, with a view to improving capacity at Scottish ports, increasing the economic return to Scotland from a variety of removal, disposal and dismantling activities.”
Roger Esson, chief executive of industry members organisation Decom North Sea (DNS), said the fund’s creation could be a “small but significant step”.
Mr Esson said: “It’s encouraging to see that the Scottish Government has started to look into support measures following the launch of the Decommissioning Action Plan late last year.
“We look forward to receiving more information regarding the DCF and how it will support infrastructure upgrades in Scotland and understand how we can support the DCF board’s objectives and work with our member companies in this part of the decommissioning sector.”
Energy editor Jeremy Cresswell said: “That the Scottish Government sees fit to pump additional public money into preparations for large-scale decommissioning is of course welcome.
“However, the pot is small and so it must be used in the most strategic and incremental way possible, but not on flights of misguided fantasy such as the proposed reopening of the former Kishorn yard for breaking up life expired platforms.”