The UK oil and gas industry is “very clear” over its approval for the Chancellor’s summer statement, an influential cross-party committee heard today.
Westminster’s Scottish Affairs Committee is taking evidence on Covid’s impact north of the border and welcomed high-ranking industry figures — Oil and Gas UK chief executive Deirdre Michie, Oil and Gas Technology Centre CEO Colette Cohen, and eminent scientist Professor John Underhill.
MPs heard there have been an estimated 7,500 redundancies in the North Sea and the UK Government’s job retention scheme has supported firms impacted by what Ms Michie described as a “triple whammy”.
“We are challenged — we have been hit by a triple whammy of Covid, the dramatic drop in oil price and the low, low gas prices.
“It happened overnight and it happened in a global context…
“We’re a big international industry but we’re a very small community. Certainly in the north east of Scotland we are feeling the impact.”
Ms Michie was asked to respond to Rishi Sunak’s mini-Budget which further defined the UK Treasury’s priorities for the job retention scheme, the creation of a bonus for employers to bring workers back from furlough, job boosts for young people and apprentices, amongst a "jobs package".
“We appreciated the government’s package in terms of the financial contribution.
“We have seen members using the furlough scheme and some of the other opportunities from the Scottish Government.
“We did welcome the announcement on the basis that it focused very much on jobs and supporting jobs, across all industries.
“There were also other aspects in terms of the carbon capture/air capture approach which were also very welcome."
On this morning's Good Morning Scotland radio programme, SNP finance secretary Kate Forbes claimed the statement did not support the industry and OGUK’s view on it would change.
Scottish Conservative MP for Moray, Douglas Ross, asked Ms Michie to clear up suggestions that “OGUK had not done their homework” before welcoming Mr Sunak’s statement.
“I’m surprised Kate Forbes …asked for a reaction to the Oil and Gas UK statement, said ‘well I would wait to see if that changes over the coming days’.
“That suggests from Scotland’s finance minister that OGUK had not done their homework before issuing their statement.”
Ms Michie responded:
“I am very clear that we did welcome the support that was given to jobs, it was a jobs package."
Scottish Conservative MP Andrew Bowie, who represents West Aberdeenshire and Kincardine, asked whether the industry had learned how better to respond to drastic events, since the last major oil downturn in 2014.
“You spoke about how the industry has come together to get through the current crisis.
“Would you say that’s a lesson learned from the 2014/15 downturn?
“Prior to 2014, a lot of companies were very much siloed in their response.”
Ms Michie replied:
“We learned some tough lessons during the last downturn in terms of cost cutting, jobs being lost and there was a learning in terms of working together and pooling efficiencies.
“We are seeing businesses under pressure and we are seeing behaviours that are not exemplary … it’s tough times out there.”