It is a pleasure to serve under your chairmanship, Mr Walker. I genuinely welcome the report and thank colleagues on the Scottish Affairs Committee not only for looking at this important issue, but for taking the time to come to Aberdeen—the heart of the UK’s oil and gas industry—to speak with representatives and hear the views of the industry on how we can move forward. That was much appreciated by the oil and gas companies there.
My constituents in Aberdeen South know better than most just how important the future of the oil and gas industry is and how difficult the past few years have been. The climb out of those difficult days has been long and not without challenges. I see those challenges every day when I speak with constituents and meet local businesses.
I was encouraged to hear the latest news from the OGA this week that North sea production reached a seven-year high last year. That shows that the sector still has huge potential to form an integral part of the UK’s energy mix and be a major source of high-value jobs across Scotland and the whole of the UK. Last week, I was pleased to welcome my right hon. Friend the Foreign Secretary to Aberdeen, where we met representatives from Oil & Gas UK at Aberdeen harbour. During his visit, the Foreign Secretary highlighted the huge opportunities that await oil and gas companies once we leave the European Union.
Balmoral Group, a company based in my constituency, specialises in subsea buoyancy, renewable energy products and engineering solutions. It employs 500 people and is highly dependent on the rapidly growing markets of west Africa, South America, and the gulf of Mexico. The company is clear that its opportunities for growth are truly global. Aberdeen is a global city, and oil and gas companies based in my constituency have an increasingly international outlook. The new technologies developed through the Oil & Gas Technology Centre show the great export potential that will place Aberdeen at the centre of supply chains reaching around the world into mature and emerging markets.
Oil & Gas UK’s Vision 2035 has the ambitious aim of doubling the supply chain’s share of the global market from 3.7% to 7.4% by 2035. Those new technologies will be key to achieving that goal. They will not just unlock the future potential of the UK continental shelf, but secure the future of companies throughout the sector, as they diversify their interests. I welcome the Government’s continued work with industry to invest in technology that maximises recovery, improves efficiencies and extends the life of the UK continental shelf, while boosting the potential for export growth.
From the day we arrived in Westminster, my colleagues and I have worked hard to secure much needed support for this vital industry. I remember vividly lobbying the Treasury at every opportunity, and we were successful in securing transferable tax history for the sector, which unblocked billions of pounds of investment. Maintaining certainty on tax relief and reducing barriers to investment will be crucial to attracting the investment that the sector requires to maximise economic recovery and secure the long-term future.
The UK’s position as a market leader at the centre of global supply chains rests on the industry and Government working hand in hand to attract talent and investment as the sector prepares to navigate the challenges and opportunities of the coming years. I welcome the report on the future of the oil and gas industry, as it sets out the case for a sector deal for the industry and calls on the Government to commit to securing the long-term future of this vital industry. I look forward to the Minister’s remarks on the progress of that sector deal.
The future of the oil and gas industry rests on innovation not only in extraction to ensure that we maximise recovery, but in decommissioning. Decommissioning does not represent the end of the oil and gas industry, but a huge opportunity to use the expertise and talent of a globally focused industry to turn a liability into an opportunity. The UK will be the largest market for decommissioning spending over the next decade, and is placed at the forefront of a rapidly growing market. I welcome the report’s emphasis on the benefits of a sector deal to unlock the global potential of the oil and gas industry not just in my constituency, but in constituencies across the United Kingdom.
There is a lot of life left in the North sea, and a bright future for the oil and gas industry. Investment in new technologies and the growth of the sector at the centre of a global supply chain are key to grasping future opportunities. I welcome the report, which sets out how industry and Government can work together to secure that future.