The oil and gas sector delivers more for the Scottish economy than any other sector and a 1% increase in recovery in the North Sea would add £22 billion of extra tax revenue.
Scotland’s Energy Minister Fergus Ewing is expected to explain the importance of the industry’s success and the “huge benefits” of maximising oil and gas recovery in a debate at the Scottish Parliament today.
Mr Ewing will tell the Scottish Government that average rates of recovery are relatively low, with around 40% of resources recovered from oil and gas fields in the North Sea, compared to 48% in the Norwegian territory. It is believed there are 24 million barrels of oil still to be recovered in the North Sea, with a wholesale value of £1.5 trillion.
According to statistics from the Scottish Government, the industry supports 196,000 jobs in Scotland and tax revenue from the North Sea is forecast to raise £34 billion over the next six years. Capital investment in the industry has risen from £8.5 billion in 2011 to a predicted £11.5 billion last year.
Mr Ewing said: “No sector delivers more for our economy than oil and gas,and maximising the percentage of the oil and gas recovered should be a priority for everyone involved in the industry… Maximising recovery is at the heart of this Government’s plan for the sector – a plan outlined in the strategy we developed with the sector – and the benefits are not just financial.
“I firmly believe that oil and gas is too precious an asset to fritter away. If we are able to increase the percentage we recover, then not only will we deliver huge economic benefits – we will also prolong the length of time this valuable asset is available. Maximising recovery is about prudent stewardship of limited resources. When oil and gas was first discovered off the North Sea we were told it would last a decade – four decades on, I am determined to hand on this precious legacy to generations to come.”
Oil and gas currently meets more than two thirds of the UK’s energy needs and supports around 440,000 jobs across the country.