Alex Salmond unveils oil and gas strategy

First Minister Alex Salmond has unveiled a new oil and gas strategy for Scotland.

It includes targeting higher long-term recovery rates, boosting exports and aiming for £30bn annual sales by 2020.

Mr Salmond also announced that Scottish Enterprise would make up to £10m available to support innovation in the sector over three years.

The industry blueprint was unveiled at Hydrasun, an Aberdeen-based oil and gas supply company.

<link> <caption>The Oil and Gas Strategy 2012-2020</caption> <url href="http://www.scottish-enterprise.com/~/media/SE/Resources/Documents/MNO/Oil-and-Gas-strategy-2012-2020.pdf" platform="highweb"/> </link> , which was developed by the Scottish government in association with the industry and public sector partners, has identified six priorities.

They include strengthening the domestic supply chain, with a greater focus on resource recovery.

Another priority is to increase the proportion of export sales from 2010's level of 46% to 60%, or £18bn, by 2020.

The strategy also looks to promote opportunities for supply chain companies in areas such as offshore wind, carbon capture and storage (CCS) and decommissioning, and to ensure the sector attracts young people.

As well as cash from Scottish Enterprise to support innovation, Scottish Development International (SDI) is to boost activities in the key emerging markets of Brazil, Norway and West Africa.

'Bright future'

Oil and gas contributes almost a fifth of all corporation tax paid to the UK Treasury and supports an estimated 440,000 jobs - nearly half of them in Scotland.

As he unveiled the strategy, Mr Salmond hailed the oil and gas sector as "one of Scotland's greatest industrial success stories" over the last 40 years.

He said the industry had a bright future, with as much as £1.5 trillion of oil remaining to be extracted from reserves around the UK.

"The strategy identifies key actions which can maximise future opportunities, for example, by helping the industry secure the necessary human capital and skills, by supporting innovation and technology deployment to boost recovery rates, by assisting more companies into new markets and by delivering investment in key infrastructure," he said.

'Key driver'

"We will continue to work closely with the sector to deliver excellent services, drive growth and support the on-going success of an industry that has powered the economies of Scotland and the UK over the last 40 years, and which can continue to be a key driver of prosperity in these islands well into the middle of this century."

Labour's Shadow Energy Minister Tom Greatrex said assumptions on the future value of oil and gas should be realistic.

"The oil and gas industry is an important part of Scotland's economy, and having agencies supporting economic activity in and around Aberdeen, coupled with export potential, is precisely what should be happening," he said.

"However, Alex Salmond's assumptions of the future value of oil and gas, and potential production, could be way off the mark.

"The estimate of £1.5 trillion is based on a future oil price way above that predicted by the foremost academic expert in the field, Prof Alex Kemp of Aberdeen University."

Strategy themes

Meanwhile, Oil & Gas UK welcomed the themes outlined in the strategy.

Supply chain director David Ripley commented: "The oil and gas supply chain is the most important industrial sector in Scotland and is increasingly successful in exporting its products and services to provinces around the world.

"As this international activity grows and domestic production declines, we must ensure that the related technology and skills remain anchored in Scotland and indeed, across the UK."

He added: "We look forward to seeing the list of proposed actions required to deliver the strategy.

"We will actively encourage our members to participate to make sure the vision of a long-term prosperous sector is realised."

'Relentless pursuit'

WWF Scotland's head of policy, Dan Barlow, said the "relentless pursuit of oil" was at odds with Scotland's strong commitment to tackle climate change.

He said: "This plan risks locking Scotland into a high carbon future and threatens our marine environment as we chase oil in more and more difficult and sensitive environments.

"Developing a zero carbon economy requires a strategy that focuses on ending our addiction to oil and gas, not seeking to squeeze every last drop from beneath the seabed."

He added: "Rather than seeking to further develop and export our oil and gas we should be focusing on the vast opportunities to export clean renewable energy and technology solutions of the future."