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Aberdeen may lose out on oil HQ

Aberdeen may lose out on oil HQ

Aberdeen could lose the new oil regulator being set up in the wake of the Wood Review to Newcastle if Scotland votes for independence.

UK Energy Minister Michael Fallon said Europe’s oil capital was in pole position to become the headquarters for the body.

He will meet Sir Ian Wood next week to discuss where the new regulator will be based.

Speaking to the Press and Journal in Houston yesterday, he warned that a Yes vote in September could force the HQ south to Newcastle.

While Scotland would have its own regulator in the event of separation, Scottish Government counterpart Fergus Ewing earlier told business leaders at the Texan event that Aberdeen should be campaigning to bring the body north.

His comments drew a curt response from Mr Fallon.

“So he wants the UK regulator to be outside of the United Kingdom. Is there any example in history of the UK regulator being outside the kingdom?

“There are a number of bids. Aberdeen obviously, and Newcastle if we need to be safe and keep it behind the wall, this new wall you are going to erect.”

“Of course Aberdeen is in pole position, we would want it to be Aberdeen. But first Aberdeen has to decide if it wants to remain a part of the United Kingdom.

“It is Fergus Ewing that is jeopardising billions of investment for the final third of the North Sea story.”

But a Scottish Government spokesman said it “guaranteed” that the new regulator would be in the Granite City if Scotland voted to be independent.

He said: “Given that Europe’s Oil and Gas capital is in Aberdeen, the Scottish Government believes this is the only conceivable location for the new Regulator. 98.8% of total North Sea oil production is in Scottish waters according to Professor Alex Kemp of Aberdeen University, and with independence we can guarantee that the regulator proposed by Sir Ian Wood would be based in Aberdeen.

“With independence the Scottish Energy Department, working closely with the new regulator for the North Sea, would create the right conditions for a close, constructive and effective relationship to be forged between central government in Scotland, the North Sea regulator, and the industry.

“This model of government mirrors that which has been so successful in Norway, and represents an opportunity to begin to realise the full potential of the oil and gas industry in Scotland.”

Meanwhile, DECC’s latest offshore oil and gas licensing round, which closed for applications on April 25, has received a strong response with 173 applications from industry for around 370 blocks.

Mr Fallon said: “It’s 50 years since North Sea licensing began and there remains an extraordinary level of interest which is excellent news for industry and for the UK. We have committed to implementing all of Sir Ian Wood’s recommendations to help maximise recovery of North Sea oil and gas, and the chancellor is reviewing the tax regime.

“Making the most of Britain’s home-grown energy is crucial to keep job and business opportunities, get the best deal for customers and reduce reliance on foreign imports.”

The department will scrutinise applications over the coming months and aims to start awarding acreage in the autumn.