Oil and Gas Industry — [Mr Philip Hollobone in the Chair]

Part of the debate – in Westminster Hall at 12:14 pm on 9 October 2018.

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Photo of Andrew Bowie Andrew Bowie Conservative, West Aberdeenshire and Kincardine 12:14, 9 October 2018

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate John Mc Nally on securing this important and timely debate.

Hailing from the north-east of Scotland, having grown up surrounded by the oil and gas industry, having worked for an incredibly brief time in the sector, and now representing a constituency to which its continued success is vital, I know all too well the importance of the industry to not just the north-east of Scotland but the wider UK economy. Looking around the Chamber, contributing to debates about the industry’s future seems to be the preserve of Members who represent such constituencies as mine, which is unfortunate. Yes, the industry is based proudly in the north-east of Scotland, but it is a UK-wide industry that has contributed more than £330 billion to the British economy, supports more than 330,000 jobs across the UK and has a supply chain worth nearly £30 billion stretching into every nation, region and community across our islands—as demonstrated by Jim Shannon— both servicing domestic activities and exporting almost £12 billion of goods and services to other basins across the world.

The success of the North sea oil and gas industry is, of course, a story born in the north-east of Scotland—all good things are—but it is a whole-UK success. It depressed me beyond belief to hear, not that long ago, a colleague exclaim, when he heard about the recent discovery west of Shetland on the Glendronach field of around 1 trillion cubic feet of extractable gas—the largest discovery of conventional gas in the UK since 2008, with a productive life of 10 to 15 years—that that was remarkable. He did not know that any exploration was going on anymore. He thought it was all decommissioning and closing up shop for the North sea oil and gas industry.

Sadly, that is a common misconception. Of course decommissioning is taking place in the North sea at the moment, and the rate of decom activity will increase in the years ahead, but that is only one small part of the story. Anyone who takes a stroll around the Oil & Gas Technology Centre in Aberdeen or visits the Oil & Gas Innovation Centre in Bridge of Don, in the constituency of my hon. Friend Colin Clark, will be blown away by the great advances in technology being made. There is exciting, explorative work being done on the smaller fields in the North sea, led by enterprising smaller companies growing in the sector, such as ROVOP in my constituency. There is also the sustained commitment to the area of big companies, such as BP, which recently announced its two North sea developments, which are expected to produce 30,000 barrels gross of oil equivalent per day at peak production.

This is not an industry in decline; this is an industry with a positive future, but it remains in recovery. We are still emerging from the deepest and most sustained downturn in the sector’s history. Many jobs were lost, some companies disappeared completely and others had to radically change how they did business. However, through shared learning and experiences, through economising and doing much more with much less, and with the support of the Scottish Government and the UK Government, which has supported the sector to the tune of £2.3 billion, the industry is confident about the future.

However, as many Members have said, what the industry needs more than anything else is fiscal stability. The North sea is one of the most attractive mature basins in the world in which to invest today, because of the long-term and fiscally sensible approach taken by Her Majesty’s Treasury since 2014. It was evident a couple of months ago, however, when there was just a hint of a change in policy or an increase in tax, that that would upset the recovery and put off investment, which could have damaging consequences.

Let the call go out from the Chamber today, from every Member and from every party represented, that we wholeheartedly support our oil and gas industry, that we recognise the huge value that it brings to the entire United Kingdom and that now is not the time to consider changing the fiscal situation, increasing tax or putting off further investment. Let us work with the sector and both of Scotland’s Governments to ensure a positive, long-term and productive future for this world-leading industry.