'Mismanagement' of North Sea Oil Slammed by Energy
Minister
Published in Oil Industry News on Tuesday, 13 January 2015
Energy minister Fergus Ewing will
accuse his UK counterpart of "mismanagement" of North Sea oil and
demand urgent reform on Tuesday.
He is looking for tax cuts - however, the problem lies in the mismanagement of the oil and gas resources, as nobody in the energy industry was willing to cut down production to stabilize the price of oil. The same situation exists in the United States as well, where the oil and gas industry borrowed cheap money and spend trillions in development and production of oil and gas, without properly managing the oil output and the oil prices. That has led to the current collapse of the prices and potential economic recession (at least temporarily).
There is a need for management of the oil and gas resources, pretty much the same way we manage the water resources. The oil and gas is the property of the people and should be handled as such. This way we would better manage the development and production of this valuable resource and be able to achieve maximum economic benefit. Right now, we are left at the hands of profiteers and speculators who create these boom/bust cycles. We believe that this is unacceptable.
With the corrupt government energy employees however, we believe that little will happen. The people need to take control of this valuable resource and provide much stronger oversight of its development and usage.
Mr Ewing is expected to meet UK
energy minister Matt Hancock at a meeting of Pilot, an oil and gas taskforce
which brings together government and industry representatives, in London.
Speaking ahead of the meeting, Mr
Ewing said: "The oil and gas industry is a strong success story for
Scotland and will continue to be.
"However, because of the
mismanagement of oil and gas fiscal policy by the UK Government, challenges
remain and we must tackle the ongoing cost pressures and the fall in oil prices
head on.
"Last week the Scottish
Government published a new report setting out a range of taxation changes and
we will now consult closely with industry on these proposals.
"Today I will re-iterate our
call for urgent reform to the UK energy minister and set out the detail of our
plans to industry leaders.
"We are continuing to challenge
the UK Government to maintain the momentum for fiscal and regulatory change in
the oil and gas sector, both of which also were recognized by Sir Ian Wood as
critical to prolonging the life of the industry beyond 2050 and maximizing the
total value generated in the economy.
"I am confident that our
proposed fiscal changes will not only boost the economy but analysis based on
industry data shows that they will support thousands of jobs.
"Last year the UK Government
announced a 2% reduction of the supplementary charge rate — this reduction
doesn't go far enough.
"We are calling on the UK
Government to provide a clear timetable to fully reverse the increase brought
in in 2011.
"That will provide a strong
signal for investors that the North Sea is open for business.
"After years of using the North
Sea as a cash cow the UK Government must finally and urgently take substantive
action.
"We believe there is a
long-term sustainable future for the North Sea and we are committed to using
every lever at our disposal. It is time for the UK Government to follow
suit."
Source: www.stv.tv