Exclusive: New UK Energy Minister pledges government support for North Sea

North Sea news
Claxton workers on a North Sea platform

The new UK energy minister today insisted her government’s commitment to the future of the North Sea’s oil and gas sector was not in doubt.

Baroness Neville-Rolfe described the North Sea industry as “one of the most adaptable”.

And she pledged to work to put it in “the strongest possible position”.

Her intervention came days after the chancellor’s right-hand man indicated the sector should not expect any additional support to be announced in next month’s Autumn Statement.

Speaking to our sister paper, the Press and & Journal, at the Conservative party conference, David Gauke refused to make new pledges given the “very recent” measures introduced by George Osborne.

These included scrapping the petroleum revenue tax (PRT) and reducing the supplementary charge to 10% – backdated to the start of the year.

The chief secretary to the Treasury’s comments prompted a storm of criticism that the UK Government was “washing its hands” of the industry following calls for incentives for exploration.

But in a personal message to the north-east community, and those connected to the sector, Baroness Neville-Rolfe declared: “I want to be clear that the UK Government is committed to supporting it.”

As well as offering assurances, the Tory peer, who was appointed over the summer, praised the “fantastic work” to improve cost efficiency.

Deirdre Michie, Oil and Gas UK’s chief executive, welcomed the minister’s recognition of the efforts to restore the North Sea’s competitiveness.

But she said the maturing basin was in “urgent need of fresh investment” and called on the UK Government to do all it could to stimulate new activity on the UK Continental Shelf.

In particular, she urged a “simpler, predictable tax regime”, adding: “We also call upon HM Treasury to complete its constructive work in regard to decommissioning tax relief, by introducing measures to enable tax relief to be transferred upon an asset sale.

“This will help promote the trading of late-life fields and infrastructure, helping to maximise economic recovery from the UKCS.”

Aberdeen South MP Callum McCaig challenged Baroness Neville-Rolfe to “back up” her comments with “new actions”.

The SNP energy spokesman added: “Since they have nothing new to talk about it seems Theresa May’s government is content to rest on the limited laurels of previous Tory incumbents.

“It is woefully naïve to think £40million in seismic studies will provide an effective stimulus to a multi-billion pound industry.”

Northern isles MP Alistair Carmichael agreed the minister had “nothing new to say”.

The Lib Dem former Scottish secretary added: “If she wants to make a go of her job she would be well-advised to spend her time getting to know the offshore industry and to listen to their concerns.

“Everyone in the north-east and north of Scotland knows that our oil and gas industry remains in intensive care. It is worrying that this message does not seem to have got through to the new ministerial team.”

Baroness Neville-Rolfe, who has served on the boards of numerous companies including Tesco, ITV and PwC, is the 17th energy minister in 19 years.