Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Sturgeon says she will consider action to help oil industry amid pandemic

© PASturgeon COP26
First Minister Nicola Sturgeon

Nicola Sturgeon pledged to discuss extra support for the North Sea oil industry but failed to outline specific measures when asked about the impact of the plummeting oil price.

The first minister said she was looking at what action to take and would be raising the issue with the UK Government as well as the industry itself following the collapse of the market caused by the coronavirus pandemic.

After US oil prices fell to below zero for the first time on record, the Scottish Government’s chief economist, Gary Gillespie, said the situation was “volatile” but “with support” the Scottish oil industry would get through the crisis.

But when asked at her daily coronavirus briefing to detail support the Scottish Government would be offering, Ms Sturgeon confined herself to saying she was “considering” what action to take and would be raising the issue with the Westminster Government.

The plight of the oil industry was raised at the briefing as a report by Mr Gillespie predicted a dire outlook for the Scottish economy with growth forecast to fall by as much of a third as a result of Covid-19.

The chief economist’s document warned of an “unprecedented” fall of 33% in GDP and rising unemployment.

When asked about help for Scotland’s offshore sector, Ms Sturgeon pointed out that most of the economic levers – such as taxation powers – that can be used to help the oil and gas industry were held at Westminster.

“These are discussions we will be having,” the first minister said. “I absolutely understand why the oil and gas sector is the source of many of these questions today given what we are seeing around the oil price.”

Ms Sturgeon said talks were being held with various sectors, including oil and gas, to “make sure we are using all of the resources and levers we have at our disposal”.

She pointed out that the Scottish Government had offered support during the last oil downturn and said possible measures would be part of discussions with Westminster.

In the past the Scottish Government has set up a decommissioning fund to help the oil industry.

Unions have expressed dismay at the damage the crisis will inflict on the industry and at the scale of the job losses in the supply chain.

Oil and Gas UK has described the descent of the oil price as a “body blow” to the sector and called on “governments” to help.

West Texas Intermediate (WTI) plunged to below zero this week due to the collapse in demand caused by the Covid-19 lockdown and concerns over dwindling storage space.

The Brent crude price, which relates to the North Sea, has also fallen by almost 15% to about $22 per barrel. At the start of the year the price was above $60 per barrel. The fall has been triggered by a combination of high levels of oil production and a drop off in demand due to the Covid-19 lockdown.

Mr Gillespie warned that the oil markets would remain volatile until a way could be seen through the coronavirus pandemic. But he suggested support was needed to negotiate the crisis.

“What I would say about the sector in general is the oil and gas sector is resilient in Scotland and has been through these types of cycles before and the market will remain volatile until a path to recovery is clear,” Mr Gillespie said.

“We have seen a massive fall in demand, supply reducing to some extent and real issues around storage. Finally, the benchmark for the UK is the crude Brent oil and, again, that’s stabilising a little, but albeit at low levels.

“I think we have seen forward contracts for June around $20 per barrel, which is really challenging for the sector. But the sector in Scotland is more productive and more profitable and, with some support, can see through this.”

Recommended for you

More from Energy Voice

Latest Posts