The Aberdeen City Council is asking for a �2bn city deal to help the city through the oil price crisis

Aberdeen summit looks at solutions for North Sea oil sector

UK and Scottish politicians are meeting today in Aberdeen with industry representatives to discuss measures needed to help the Scottish oil and gas industry to pull through the current oil price crisis.

Speaking ahead of the event, Scotland’s First Minister Nicola Sturgeon said it was a "very challenging time for the industry".

"I think it is very important to be clear, though, that the North Sea oil and gas industry has been, is and I believe will continue to be a significant asset for Scotland and the Scottish economy,” she told BBC Radio Scotland.

"But it faces a challenge at the moment and that means it is incumbent on all levels of government to work together to provide the industry with the support it needs at this time."

Sturgeon said the Scottish Government is working on analysis of the impact of the collapsing oil prices on the economy. However, she said, the outcome of the analysis will be strongly dependent on tax changes expected to be introduced next month as part of the new budget.

"In due course we will produce forecasts but those forecasts are very dependent on the tax regime because it is the tax regime that determines the amount of revenue that comes from the North Sea, so we need to see what the tax changes are that the UK Government is going to make before we can produce those reliable forecasts," she said.

Scottish Secretary Alistair Carmichael, who is also taking part in the meeting, said the UK government is taking the issue seriously and is preparing changes to the tax regime.

"It is understood across government - in the Department of Energy, the Treasury and in the Scotland Office - that this is a significant moment in the history of the industry. As to what will be in the Budget, I'm afraid that's not for me to tell you today," he said.

The Aberdeen City Council, organising the summit, calls for a £2bn city deal to help Aberdeen through the crisis. The council’s leader Jenny Laing said the industry was in need for help even before the major slump in the price of oil.

"I would hope that governments at all levels will be paying attention to what the industry is saying, because for too long they have used the industry as a cash cow,” she told BBC Radio Scotland. “In my opinion, it's now time for us to pay back and make sure we can sustain the long-term future."

Sturgeon confirmed that the Scottish government is negotiating terms of the city deal.

"My officials are already in discussion with Aberdeen City Council about the details of their proposals for a city deal and I'm very keen that we continue to take that forward."

But she added it was important for ministers to know "the detail of what a city deal is intended to deliver" before the Scottish Government could decide how much it would contribute

Mr Carmichael said: "I have always been very clear that I could see a tremendous opportunity for the Government and for Aberdeen and Aberdeenshire in getting a city deal of that sort landed.

"It's not for me to announce what money is going to be available today. That is something that we have already made clear will be coming forward in the budget."

Scottish Labour leader Jim Murphy has called on the Scottish Government to introduce a £10m resilience fund to help areas facing financial shock.

"A resilience fund would enable a local authority to take immediate action to offset some of these problems such as offering business rates relief or setting up training opportunities for those losing their jobs,” Murphy said.

"The fund would only be used in the event of an area facing a substantial economic shock. The comparison I made previously was with the effect on Lanarkshire from the closure of Ravenscraig steel plant."

Meanwhile Andy Samuel, the chief executive of the new Oil and Gas Authority (OGA), has announced the first three appointments to his leadership team.

The regulatory body was set up following Sir Ian Wood's review of the UK oil and gas industry in 2014. Simon Toole, currently head of offshore licensing, exploration and development in the Department of Energy and Climate Change (DECC), will become director of licensing and legal.

In addition Stuart Payne has been appointed as director of change and organisational development, and will lead the design and ongoing development of the OGA organisation with responsibility for managing human resources, while Ian McKenzie has been appointed chief implementation officer, and will head up the finance, procurement, internal audit and IT activities.

Experts have warned that the industry is in crisis, with a barrel of Brent crude more than halving in price since last summer to around 50 US dollars (GBP33) a barrel.

Hundreds of job losses, pay cuts and freezes have been announced by companies including BP, Taqa, Petrofac and the Wood Group in recent weeks.

Industry leaders and Labour and SNP politicians are now urging the UK Government to introduce urgent tax cuts to help the North Sea.

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