Politicians rule out public ownership as North Sea oil faces biggest challenge
SCOTTISH politicians ruled out public ownership of North Sea oil yesterday — but promised to support offshore workers and a long-term future for the ailing industry.
Questioned by the Morning Star at an emergency summit on the future of the oil industry in Aberdeen, First Minister Nicola Sturgeon, Scottish Secretary Alastair Carmichael and city council leader Jenny Laing instead talked up tax breaks and infrastructure investment.
Ms Sturgeon and Con-Dem Mr Carmichael joined oil bosses, union reps and civil servants at the summit, which was called following the announcement of over 1,000 job losses at a major firms including Shell, BP, Chevron and Talisman.
Unions have also raised the alarm over an assault on pay and conditions, with workers being forced onto new contracts slashing break periods within shift patterns.
Ms Sturgeon used a keynote address to argue that trade unions must be “key partners … as the industry makes changes required of it.”
But Unite officer John Taylor told the summit the treatment of workers during the crisis had been an “absolute disgrace.”
He savaged oil bosses such as UK Oil and Gas chief Malcolm Webb and new regulator Andy Samuel for boasting of their foresight of the crisis.
Industry figures repeatedly referred to the long-term challenge facing the “mature” North Sea.
Mr Carmichael said industry cries to cut taxes further “are being heard inside the Treasury.”
Tory Chancellor George Osborne cut the supplementary charge in May from 32 to 30 per cent — but unions have called for investment to be targeted so state subsidies are not hived off.
When the Morning Star asked if Britain should follow the example of Norway and ramp up state involvement in the sector through partial public ownership, the Scottish secretary was unequivocally opposed.
“This industry is nothing without its workers,” he said.
“Does that mean that we should create a level of public ownership in the industry? No.
“What the industry needs at the moment is stability to go ahead and that is what we’re hearing from all parts of the industry, not just the oil companies but the workforce themselves.”
And in a classic sidestep, Ms Sturgeon replied: “We need to deal with the challenge ahead.”
She said there were “different levels of government” where politicians could make interventions — before listing alternatives to public ownership such as the Holyrood’s responsibility to “sustain employment” and Westminster’s power to change the “fiscal regime.”
But she added: “What I would say is that the comments from the unions this morning have to be listened to, the characterisation of the lack of discussions.”
Ms Laing also rejected any discussion on public ownership, refocusing her answer on relations with the workforce.
The majority-state-owned Statoil in Norway controls 60 per cent of production off the Norwegian continental shelf.
Mr Taylor told the Morning Star: “The very fact that there is public ownership of oil in Norway not only benefits the future of the industry, but it benefits the present too.
“There are no real leaders in the offshore industry. The oil industry is very fragmented in the UK.
“In Norway, Statoil says: ‘This is the standard and everyone else follows.’
“Years ago here people followed Shell and BP, now they’re not really major producers anymore.”
Aberdeen asks for extra £2bn
LABOUR Aberdeen Council leader Jenny Laing called for a £2 billion investment package for her city at yesterday’s oil summit.
The funding could be channelled as part of the government’s new city region scheme.
Blaming Tory austerity and a prolonged “lack of enabling public-sector investment” for holding back private credit, she said such a scheme would “stimulate growth while increasing returns.”
Scottish Secretary Alastair Carmichael said Aberdeen’s workforce could develop “highly valuable and marketable expertise” in oil decommissioning, stressing that “no-one wants to see a rush to decommissioning.”
Landin's Lowdown: Everyone’s talking about oil, but what’s next counts
NOT for the first time, everyone’s talking about oil here in Aberdeen.
In the taxi queues, behind the counter at Sainsbury’s — and of course in the lounge car of the Caledonian Sleeper.
At the identikit conference centre on the city’s outskirts, buzzwords abounded on stage — and maybe it was going to be exactly the talking shop many predicted.
It was left to Unite official John Taylor to save the day.
“Everyone in this industry seems to be saying they knew what was going to happen,” he blasted. If that’s true why were we not having these discussion three or four months ago?
“Why was the first time we were made aware of it when our members were told they would lose their jobs?”
Oil and Gas UK chief Malcolm Webb insisted he had “been shouting about it.”
“I must have been somewhere else because I didn’t hear the shouts,” Taylor retorted.
Later Taylor told me these gatherings “always seem to go well” but that everything rested on what happened next.
Some will raise eyebrows at the very thought of fossil fuels having a long term future.
But the snappy Webb said politicians need to “wake up” to the future of oil and gas if we don’t want the lights to go out.
It was fitting for those of us who had travelled up on the sleeper. When we woke up, the power had cut out — and the stewards handed out glow sticks so we could get dressed.