North-east MSP calls for increased support for oil and gas sector

A north-east MSP is calling for increased support for the oil and gas sector amid the Covid-19 pandemic.

Labour’s Lewis Macdonald has lodged a motion at the Scottish Parliament to highlight the challenges faced by the industry.

Trade body Oil and Gas UK has predicted as many as 30,000 jobs could be lost over the next 18 months because of a drop in oil prices during the coronavirus crisis.

Mr Macdonald is also calling for the Scottish Government to set up its Energy Task Force, which was established to protect oil and gas jobs but it was stood down in 2017.

He is also backing Unite the union’s Save Offshore jobs campaign and the union has warned that tens of thousands of jobs are at risk with upwards of 3,500 workers immediately at risk through redundancies or furloughing by September.

Mr Macdonald said: “I fully support Unite’s Save Offshore jobs campaign and their call for public investment in the industry which is of huge importance to the wider Scottish economy.

“The challenges currently facing the oil and gas industry are immense. There is an immediate threat to the industry due to the collapse in demand brought on by the pandemic.

“But we also need a plan to protect jobs in the medium to long-term. This is why I have called on the Scottish Government to re-establish the Energy Jobs Taskforce.

“We need a permanent forum for joint working among energy companies, trade unions and government agencies to protect existing jobs, support an energy transition and promote future growth.”

Mr Macdonald’s Holyrood motion asks the parliament to agree that the combination of low oil prices and Covid-19 is an “existential threat” to North Sea oil and gas.

It also calls on the UK and Scottish governments to provide support to the industry to protect jobs and skills, production, investment, decommissioning and tax revenue.

Unite Scottish Secretary, Pat Rafferty, welcomed the support from Mr Macdonald and wants more action for the oil and gas industry.

He said: “Unite welcomes Lewis Macdonald’s parliamentary motion drawing attention to the challenges facing the oil and gas sector.

“Scotland’s economy faces a long period of getting back to some form of normality after the Covid-19 pandemic subsides, but the north-east and the islands will be one of the areas hardest hit.

“It’s vital that specific measures are brought forward to stabilise the sector and to support those areas in greatest need. We hope that this motion further focuses the minds of all parliamentarians on the need for implementing a plan which saves offshore jobs.”

Scottish Energy Minister, Paul Wheelhouse, said:“This is an extremely difficult time for our business community and we have recognised from the outset the need to do all we can to help key sectors recover.

“The oil and gas industry is a critical component the Scottish economy, employing more than 100,000 directly and indirectly and I will seek to engage with all MSPs on the actions we are taking to support it as it responds to Covid-19 impacts and headwinds in oil and gas markets.

 

“However, in addition, as set out in our 2017 Scottish Energy Strategy, the sector has a crucial role to play in the energy transition required to move to an economy and society that generates net zero greenhouse gas emissions.

“These factors underpin why I have recently chaired two meetings of the Oil and Gas, and Energy Transition Strategic Leadership Group, which includes key stakeholders in the industry, that will move to a monthly frequency to monitor the impact of the downturn and identify practical actions to support the sector and, critically, its workforce.

“The SLG will, for the foreseeable future, also seek to complement and reinforce work already underway through the OGUK Pandemic Steering Group, the Oil and Gas Authority’s Supply Chain and Exports Taskforce, and the Energy Skills Alliance, to identify any gaps in support and opportunities to stimulate supply chain activity.

“The refocused SLG, which involves the Oil & Gas Authority, Oil & Gas UK, trades unions, enterprise agencies, offshore operators, downstream sector representatives and supply chain companies and wider industry representatives, as well as the Oil and Gas Technology Centre and Opportunity North East, held its first virtual meeting on April 2nd and following on from that has, at its second meeting on  May 7 adopted a taskforce approach that will focus on the Covid-19 response; the longer term economic response to take account of the potential for a ‘low price for longer’ environment; and to seek to identify actions to deliver the industry’s Roadmap 2035, a blueprint for net-zero emissions from production activity.

“Many of the key levers needed to support the sector are reserved to the UK Parliament, and we will seek to work closely with the UK Government to ensure both governments are doing all they can to protect jobs and retain vital skills.”