As the hydrocarbons capital of Europe, Aberdeen should not just be the ‘frontrunner, but the only runner’ as the new industry regulator headquarters, Scotland’s First Minister Alex Salmond told the Oil & Gas UK conference today (Wednesday, June 11).
The First Minister also set out his vision for better stewardship of the North Sea and a stronger, renewed partnership between the sector and government in an independent Scotland, with “an approach which values partnership and consultation; prioritises stability and certainty; and which will see a long term commitment to effective stewardship.”
This approach includes:
• Tax stability. The Scottish Government has no plans to increase the overall tax burden on the industry, and commits to no changes made to the fiscal regime for oil and gas without prior consultation. This contrasts a record of sudden fiscal changes by successive UK Governments
• The industry regulator headquarters, and oil and gas policy officials to be located in Aberdeen, at the very heart of the sector
• The opportunity to invest in an oil fund from the first year of an independent Scotland, which could include investment in global low carbon projects.
Addressing delegates at the Aberdeen Exhibition and Conference Centre, the First Minister said:
“The Scottish Government understands the importance of stability and certainty for Scotland’s energy sector to continue to prosper. In fact, we have already made it clear that there are no plans to increase the overall tax burden on the industry and we will not change the fiscal regime without prior industry consultation.
“It’s worth bearing in mind the promise of prior consultation is more than just a pledge by this Government. It’s in keeping with the approach and style of the entire Scottish Parliament. We already operate in a different culture from Westminster – and it’s one which lends itself more readily to the consultation, transparency and stability that your industry needs.
“The UK Government has been reported as saying that Aberdeen is a ‘frontrunner’ to host the new Regulator – but with independence, I can guarantee that Aberdeen will be the only runner as the only conceivable location for the Regulators headquarters. It should not be in pole position but in sole position. This crucial new body charged with maximising this resource of the North Sea must be a shared initiative and financed that way. A new Regulator should not be treated as a way for Government to cut its budget on oil and gas regulations, instead Government should continue to meet a proportion of the cost.
“The UK is the only major oil power which does not invest any oil revenue for the future. Independence will allow Scotland to do things differently – the Government of the day will have the option to start investing in an oil fund from the first year of independence.
“Great oaks from little acorns grow: Norway established its oil fund in 1990 with the first payment of £200 million made in 1996, and 18 years on it is worth more than £500 billion. During the same period, the UK has built debts of £1.2 trillion.
“On September the 18th of this year, a new chapter will begin. The enterprise ingenuity of the oil and gas industry will continue. But it will be supported by a new approach from government. An approach which values partnership and consultation; which priorities stability and certainty; and which will see a long term commitment to stewardship.”