Scotland: Oil, gas keys in London's hands

Jul 08, 2016 12:00 AM

While Scotland is confident about the wealth left in the North Sea, it's London that holds sway over the oil and gas sector, a Cabinet secretary said.

"The Scottish government strongly believes that the North Sea oil and gas sector can have a bright future for years to come," Scottish Cabinet Secretary for the Economy Keith Brown said in a statement. "We are doing everything in our powers to bring this about but it continues to require a concerted effort by government, industry, and regulator."

Brown said he secured assurances in June from his counterparts in London that support for the oil and gas sector would continue not only during an era of lower oil prices, but also as the region charts a future independent from the European Union.

The majority of the British voters taking part in a referendum on membership in the European Union last month voted in favor of leaving the bloc. Stock markets collapsed in the wake of a decision scrutinized by major world economists. Though it would have to emerge under different oil market conditions, the Scottish government said a second referendum on independence is on the table after the so-called Brexit vote.

More than half of the voters taking part in the first Scottish referendum for independence from the United Kingdom said no in September 2014. At the time, the Scottish government said it would rely on revenue from oil and gas to power an economy fueled by renewable energy resources. Brown said he was working in support of the best interests of an industry under pressure from lower oil, but the British government still holds most of the influence over the sector.

"The U.K. government retains control of the key taxation levers affecting the sector, and must take the action needed to protect jobs and enable the industry to best deal with the challenges it faces," he said.

With crude oil prices down 50 percent from what they were in the wake of the Scottish vote for independence two years ago, energy companies like BP are cutting back and, as a result, thousands of jobs have been lost in the British oil and gas sector so far this year. The Scottish first minister stressed last week that her country was still a good place for business.

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