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£1trillion Sector Deal for the Oil and Gas Industry?

Oli Contractor

The Scottish Secretary David Mundell has been quoted as saying that there is ‘Every possibility’ that a lucrative £1trillion deal for the Oil and Gas industry can be completed. The UK Government is also said to be open to agreeing the deal, according to a Cabinet member.

The Conservative minister has been very positive over an agreement, however he has warned that the North Sea industry should be ‘very worried’ over comments made recently by Labour leader Jeremy Corbyn, who is said to be considering a review of offshore taxes, should he become prime minister.

Leaders within the Oil and Gas industry believe a sector deal could be worth a massive £1trillion to offshore firms over the next 17 years if the deal can be agreed.

The Scottish Conservative leader Ruth Davidson has revealed recently that she was campaigning ‘Very, very hard’ for such an agreement for the oil and Gas industry and she hoped to ‘bring that home’ within the coming year.

When asked if he shared Ruth Davidson’s confidence, David Mundell said ‘We’ve gone along a route in the sense that we’ve got the UK industrial strategy. That’s a very important backdrop. It’s a strategy that recognises the importance of the industry and recognises the scope for sector deals. We’re open to such a deal and it has to be said the oil and gas industry is one of the most effective at making its views known to government. I think there’s every possibility that there can be an oil and gas sector deal and that dialogue continues’.

The UK Government has confirmed that it would press ahead with a number of sector deals during November as they launched their industrial strategy, with the first awards being offered to the construction, artificial intelligence, automotive and life science industries.

The offshore Oil and Gas industry representatives have since been drawing up proposals to try to secure their own agreement. The details of this agreement are yet to be released however, a sector deal for Oil and Gas would be expected to focus on extending the life of the North Sea industry and boost the UK’s capabilities around transformational technology, decommissioning and underwater engineering.

Jeremy Corbyn was quoted as saying last month that he would ‘look very carefully at tax changes’ for the industry if he became prime minister, particularly those linked to training, investment, and research into high quality products and techniques.

But David Mundell insisted the sector should be careful, saying ‘I would be very worried if I was the Oil and Gas industry about any Jeremy Corbyn tax review because every other Jeremy Corbyn tax proposal is to increase tax on everybody, on individuals, on businesses, on everybody. I find it very hard to believe with all his other proposed tax rises, that the one industry that Jeremy Corbyn would single out for tax cuts would be the Oil and Gas industry. I just don’t think it’s credible. His position is that business is a cash cow for tax, that business doesn’t pay enough tax and business should pay more tax’.

As a company, WJF Technical Support are committed to working within the Oil and Gas sector in the North Sea. Working closely and supporting a number of clients by sourcing and placing technical staff in both contract and permanent positions. With particular strength and knowledge in the drilling, completion, well intervention and pipeline and process sectors, our aim is to become the first stop for engineering and technical personnel across the Oil and Gas industry. Engineering and technical support staff with WJF Technical Support, are chosen for their professionalism, competency and flexible approach to completing a project.

If you want to talk to us about our work in the Oil & Gas industry, please call us on 01224 232991.