 Felly, rwyf amddai'n dweud â'r cael plyddiadau a fyddai yn ddechrau'n ei bwysig. Yr eich rai Felnyddoedd Cymru yn ddweud gan ffostiwt 23010, yn ei ddweud am Lyw Will MacDonald, i digad, yn gy adjustment y brosidol, yn eu lleol, yn y cyfrifol rydych chi. Rwy'n grifetol y blaenau cyfrifol gyda tharwef ac rwyf honno ddweud dros gyfrifol gyda'n eu llwyddu. Llyws Macdonald will now open the debate. Around seven minutes please, Mr Macdonald. Thank you very much. The last two years have been tough for North Sea workers. Thousands of people have lost their jobs perhaps as many as 120,000 across the UK. Many more have lived with the fear of unemployment, the prospect of a longer working week or less take-home pay. Jobs have been lost in the supply chain and manufacturing right across Scotland and in the service economy, in and around Aberdeen and the north in general. Some say that the worst is behind us and that confidence is recovering, but as major contracts come to an end this year, more jobs will be put at risk. The figures produced by Oil and Gas UK are stark. Capital investment down nearly 40 per cent in two years. Exploration and appraisal drilling at an all-time low. New oil and gas found in 2015 equivalent to only a quarter of annual production. Less investment this year means less production next. Oil and Gas UK therefore concluded that new investment is vital to sustain long-term activity. They are right about that. The question is what can be done to achieve that new investment and what else needs to happen? Cred unions are a vital source of support for working people in tough times. I am delighted that offshore members of Unite are here today with Scottish Secretary Pat Rafferty and regional organiser Tommy Campbell and I know from past experience that many more will be tuned in to the debate on BBC Scotland's holiday life. Oil and Gas industry unions have had their work cut out in the last two years. Their activism and vigilance will be just as important in the period ahead. The industry itself has accepted the need for change. High costs in the North Sea before 2015 were not down simply to the maturity of the oil province far less to the cost of labour. They were down to a culture of competition for its own sake. Too many companies spend too much time and money doing the same things as each other in lots of different ways, while strategic thinking about the big picture was put off until another day. That day arrived with the price crash two years ago, and there has been some new thinking going on since then. Industry has bought in to maximising economic recovery and to cutting the costs of inefficiency and duplication to make that happen. However, that must not put the whole burden on the shoulders of the workforce nor should cost cutting ever be at the expense of training or maintenance or safety. A petrochemical production plant in a hostile offshore environment is no place for compromise in any of those areas. I want to take this opportunity today to pay tribute to the late David Doig, chief executive of Alpito, whose achievements will be commemorated tomorrow in Aberdeen. The Press and Journal reported on his untimely death last month, saying that his vision helped to make the North Sea workforce one of the most skilled and professional in the world. David Doig worked tirelessly for the oil and gas industry to build a modern apprenticeship scheme that will stand the test of time. Alpito this week raised concern that the way the Scottish Government plans to use the funds raised in Scotland from the new apprenticeship levy will take money out of training in oil and gas. The best tribute ministers could pay to David Doig's legacy would be to ensure that that does not happen. Government, of course, has a number of responsibilities in this field alongside industry and trade unions. That is at the heart of today's debate. I have called many times over the last two years for action from both the Scottish and UK Governments. The Scottish Government and its agencies have offered help to some of those who have lost their jobs, which is welcome, and the UK Government has acknowledged that tougher times require a different tax regime, which is welcome, too. They have also acted on the recommendations of the Rwyd Revue to establish a new and powerful regulator in the oil and gas authority, but there is more that both Governments can do. The OGA has gone off to a strong start. It is actively encouraging a more collaborative culture and promoting transfer of assets to companies willing to invest. It has spent £40 million of public money in shooting new seismic, and it has made that data available to any company willing to use it. Both Governments should now work together to build on that model and to use their access to capital to invest in critical infrastructure, just as the OGA has invested in vital new data. Critical infrastructure offshore means networks of platforms and subsea facilities connected by pipelines and flow lines. The biggest risk to future economic activity is that a key piece of that infrastructure is shut down because it no longer makes money, but its closure has a knock-on effect. Premature decommissioning of infrastructure can block oil and gas production upstream so that one early closure leads to another. Rational planning to avoid that is part of the remit of the OGA, which has promised to produce an overall decommissioning strategy, a decommissioning plan and 10-year roadmaps, including more detailed area plans, all of which can help to stay in critical infrastructure by planning ahead, and all of which I hope that we will see soon. I am grateful to Lewis MacDonald for that point and also for the turner of his remarks this afternoon. Would he welcome the enquest take-off of a want-of-a-better expression of the Sulunvo facilities, particularly in the context of forward planning, as they are a company that we hope will extract more of where BP is now seeking to develop west of Shetland rather than the east of Shetland basin? Lewis MacDonald? Davish Scott is quite right. It is a matter of the onshore infrastructure in Shetland, also the offshore infrastructure in the North Sea itself. Where that gets into the hands of companies prepared to invest, the problem has been addressed. However, that is not happening yet across the board. That is really what I am keen to pursue today. Co-investment by public and private sector partners can make a difference in those circumstances. PWC recently published a sea change report on the future sustainability of the North Sea, which drew on interviews with 30 senior executives in the industry. Those industry leaders called for government to address the ownership of critical infrastructure, which could be run and maintained on a nationalised basis. They said that the end goal should be a national grid of North Sea pipelines and hubs, and they proposed that a national shared pool of critical equipment could also be managed by a further Government-backed entity, the UK Offshore Equipment PLC. The state must act where markets fail to deliver, but that does not mean giving public money away. Public sector operators of infrastructure or equipment can charge competitive prices and make a return, but they can also act in the public interest to maintain production and spread risk. The north-east economy and the oil and gas workforce have shown tremendous resilience to get through the last two years. Now is the time to offer fresh hope for the future, and that is what I call for today. We move to the open debate, and I call Alexander Burnett to be followed by Stuart Stevenson. Around four minutes, please. Thank you, Deputy Presiding Officer, and thank you to Lewis MacDonald for bringing Mr Bates to the chamber today. The oil and gas sector has been the beating heart of the Scottish economy for many decades. Since 1970, the sector has provided more than £300 billion in production taxes and provided employment for 330,000 people. However, since late 2014, the price of a barrel of oil has dropped substantially, and we have seen drastic spikes in unemployment in the north-east. In 2015, the UK Government commissioned and implemented the wood review, which called for fiscal and regulatory support. George Osborne, the then Chancellor, stood in to save the industry with a halving of a supplementary charge and a zeroing of a petroleum revenue tax. It should come as no shock to the chamber that, since those drastic measures, we have seen a rise in production, and production was up by over 10 per cent in 2015, the first increase in over 15 years. Similarly, on the regulatory side, we have seen the creation of the OGA, or Oil and Gas Authority, and we should congratulate them, as Lewis MacDonald did, and the sector as a whole for lowering the lifting costs of an average barrel of oil from $29 to $16. It is a journey that is continuing to improve on. Costs are now down by over 45 per cent as the sector becomes more and more efficient, but it is a journey that needs further support. Just last Friday, I attended the opening of the Oil and Gas Technology Centre, where Sir Ian Wood spoke of aiming for the recovery of a further 20 billion barrels against our current projections of 10 billion. It is a target that can be achieved, and the extra turnover of $550 billion would be of considerable benefit. However, it will not be easy, and that is why, despite the attention on decommissioning, we must be talking about extending not ending the North Sea. To put this in some perspective, the total costs that are predicted to be spent on decommissioning only amount to three good years of investment in North Sea production, which is why, although $5 million, offered by the Scottish Government, will no doubt be appreciated by those looking at the end of the north-east economy, it is, according to the industry experts, money being spent in the wrong area. By contrast, in the most recent UK budget, it was good to hear further commitment from Her Majesty's Treasury with its driving investment plan, reducing administration costs across the board—a move welcomed by the industry body Oil and Gas UK. We need to be looking at extending the life of existing fields, maximising recovery from identified small pools, and encouraging future investment. We do that by backing our industry to continue to innovate and collaborate, to identify subject matter experts, and to discourage operators from asset blocking. The steps are happening, as I said. Mike Rumbles I thank Alexander for giving way. What is the view of the Conservative Party? Does it believe that some direct public investment by the Scottish Government directly would be helpful, or should it still be the private enterprise that does it? Would you think that it should be a combined approach? Alexander Burnett I think that, at this stage, we very much believe that the private sector is capable of making the changes. As I was highlighting with the OGTC opening, and the recent transfers of Solomvo, as his colleague alluded to, and Shell's £2.4 billion deal with Chrysor, that is happening. As long as those asset transfers are happening within the sector, then the system is working. It is when those transfers are not happening and we get asset blocking where the OGA has to exert pressure, and we will see how that progresses. At the moment, I believe that the system is working and should be continued to be allowed to work. Just to conclude, we must continue to make the northeaster hub for excellence and efficiency and knowledge in the sector, and to continue to export our skills across the globe, especially in times of Brexit. I call Stewart Stevenson to be followed by Jackie Baillie. Thank you, Presiding Officer. Let me join others in thanking Lewis Macdonald for the opportunity to discuss this important topic. For my constituency, with the world's largest offshore oil support base, with the St Fergus gas terminal, those are very significant issues indeed. Indeed, unemployment, historically very low, has significantly risen in the light of the downturn in the industry. Still leaving us in a much better place than much of Scotland, but nonetheless we should not discount the fact that the people who have lost their jobs are people who are often the higher earners, so there is a disproportionate effect on the economy as a whole. I have no difficulty in subscribing to all the words that Lewis Macdonald has incorporated in his motion today. Of course, the price of oil, the price of gas, are not simply determined by economic factors, but by macro-political factors in the world stage. We know that the price of oil was driven down because of choices that were made in other countries to up-production. I think that some sanity has returned to the market and that has made a small contribution. We have seen the industry grow from the very small beginnings when a national concern did play an important part in the original. Some of us will remember and we will remember who sold it off to BP many decades ago. There is, of course, a role for the state in supporting the broader energy sector of which oil and gas is the major part in the north-east. We are feeling a bit put out, to put it no more strongly than that in my constituency, that we have lost many of the opportunities of diversification. We have built up a huge body of people with skills that can be applied in other sectors of the energy industry, in particular looking at offshore energy, which will, over time, become more and more important, and, of course, the common capture and storage at Peterhead and, indeed, in the north of England as well that was in the competition. It is important that the state takes a role in making sure that we can continue to exploit the skills, the knowledge and the people who have been working in our industry. In the short term, it is very much welcome that the University of Aberdeen has identified that there are formations, for example, around rockhole that have not previously been exploited. One of the sayings in the oil industry is how do you strike all, drill lots of dry wells, and around rockhole there simply has not been enough activity because the previous understanding of the geology did not sustain that. That is a change that may assist the industry more broadly. Even in the sectors that are mature, the increasing efficiencies and the exploitation of existing infrastructure create significant opportunities as the price of oil creeps back upwards for us to have a profitable, long-term sustainable industry. There is a 40 or 50-year future for our North Sea oil industry, and youngsters should be encouraged to acquire the engineering skills to go into that industry. We also have to consider the broader issue of energy security. There is an intrinsic value in having energy that we in the UK and Scotland can control, which detaches us to some extent from the vagaries of international decisions, international energy markets. There is a place for a variety of ways forward heavily relying on the private sector, but there is also a role for the Scottish and UK Governments, which I hope that they will discharge with diligence and appropriate decision making. Jackie Baillie, to be followed by Liam Kerr. I too thank Lewis MacDonald for bringing this debate to the chamber and for giving members an opportunity to discuss the oil and gas industry. I associate myself entirely with his remarks. The downturn in the oil and gas sector has had a significant impact, particularly on our economy in the north-east, but also across Scotland. It has also had a clear impact on the thousands of people who rely on the sector for work, both directly and in the supply chain. Lewis MacDonald is right, in my view, to say that the fate of our oil and gas industry cannot simply be left to market forces alone. What more can we do? Given its importance to our economy and to Scotland's finances, I think that it is quite right to expect the Scottish Government to work with the UK Government to intervene where it is appropriate to do so and protect vital North Sea assets that are threatened by the downturn in the oil price. Scottish Labour regards co-investment as essential. We would set up a new body to do that, but that co-investment in the infrastructure would protect jobs and protect the industry's future. We would want to see that infrastructure, such as platforms and pipelines, which would help to sustain oil and gas industry through this tough time. However, it would prevent important assets being lost much earlier than planned. Indeed, I will. Mike Rumbles What I was trying to find out really is the Labour approach that it should be the state that takes it over, or should it be a co-operative approach with private industry as well as in joint ventures? Jackie Baillie I think that it is about co-operating so that the state intervenes, but it does so alongside industry and also in discussion with the workforce and the trade unions. It is that co-operative approach that I was so disappointed to hear the Conservatives dismiss earlier on in the debate. However, the UK now estimates that the oil and gas industry has lost something like 120,000 jobs since 2014. Although it is a global industry, 38 per cent of those jobs remaining are in Scotland. The industry that we know supports the livelihoods of thousands of families across the country. It is important to remember that every job that is lost in the oil and gas industry is the loss of a highly skilled member of our workforce. We need to be sure to do as much as we can to retain those skills in our economy. I Know Skills Development Scotland's own website tells us that something like 1,500 people have been approved for funding or retraining and upskilling. That is a welcome increase from the 91 people at the very start who were helped up until June last year, but it still only represents something like 1.5 per cent of the 120,000 people affected by the downturn. We should constantly be challenging ourselves to ensure that we are reaching enough people in the right places. The Cabinet Secretary for Education and Skills is not here. I recognise and announce that a great deal of fanfare funds to reskill oil and gas workers as teachers, because we know that there is a shortage of them in the north-east. It is disappointing to note that a mere 12 have been trained, and I again challenge us to do much better than that. Lewis MacDonald makes the important point about safety and training, and I would echo that. However, it is time that the Scottish Government published an up-to-date oil and gas bulletin. The last one was published in June 2015, after much nagging of the Government to do so, and it was at the beginning of the oil price downturn. A lot has happened since then. We need to assess the continuing impact on the Scottish economy and ensure that the focus is absolutely on helping the industry. The priority for everyone remains working with the industry to maximise economic recovery. Let me say this. We do this by investing in infrastructure. We do this by incentivising exploration. There is a role for the state in doing so, but we need to also begin planning for decommissioning in the north-east. It was only last month that an application was made to the UK Government to decommission the Brentfield. Although the majority of decommissioning work is already done in the north-east, the final stage is going to companies in other countries. I welcome the First Minister's announcement of £5 million. It is a drop in the ocean. We are lagging behind this opportunity, and we need to do more to ensure that Scottish firms keep the work here. Liam Kerr, to be followed by Richard Leonard. Thank you, Deputy Presiding Officer. I sincerely thank Lewis MacDonald for securing this member's business debate today. It may have dropped off the daily national news agenda, but the fact is that the situation in the North Sea is still a huge worry to those employed in the sector, to the supply chain, their families and all the supporting sectors, not only in the north-east but across the UK. It is very important that Lewis MacDonald has managed to get this back on the agenda. I thank him for that. The economist stated only last week that the weak performance of the overall Scottish economy is linked directly to the problems in the energy industry. I accept that, thanks to the strength and resilience of our United Kingdom economy, tax revenue losses have been shared across Britain, but that is about so much more than just revenue. Of the perhaps more than 120,000 jobs lost in the UK oil and gas sector by the end of 2016, over a third have been in Scotland and the vast majority of those have been in the north-east. Real people with real families paying mortgages in a context of increasing council tax and house prices falling faster in Aberdeen than anywhere else in Britain. Not that it is particularly easy to sell your house anyway for reasons that, in a consensual debate, it is probably best not to go into. Then there are the associated industries. I recall in 2013, even budget hotels were charging upwards of £150 a night. Premium rooms were setting you back in the region of £300, no more. The latest figures show that the average price of a room has dropped by a third and store vacancies have risen on Union Street. Only last month's Jamie Oliver announced that his flagship restaurant is to close. But it is not all doom and gloom. As Alex Burnett said, production has increased by over 10 per cent in 2015. Industry efficiencies are driving a 45 per cent drop in lifting costs to $16 a barrel. 330,000 jobs are still supported, 38 per cent of which are north of the border. And there are up to 20 billion barrels of oil still to recover. The motion correctly highlights that both Governments do have roles to play. The UK Government has effectively abolished a petroleum revenue tax and slashed the supplementary charge to 10 per cent. It has provided a £2.3 billion package of measures and committed £40 million to new seismic studies. Oil and Gas UK said that they, quote, welcome those measures so that they will build on the industry's achievements in improving efficiency in the face of low oil prices, boosting the sector's competitiveness and helping to restore investor confidence. The industry has called for Government to work with them to ensure a competitive business environment through appropriate business rates and supply chain promotion, to deliver world-class infrastructure such as transport and broadband, to continue to support the oil and gas technology centre and skills retention through, for example, the energy jobs task force, and to complete the Treasury's work on decommissioning tax release and champion the industry and the supply chain capability nationally and internationally. What it does not call for is for politicians to step in and tell industry how to do its job. Oil and Gas UK state, and I quote, market forces have resulted in several positive deals recently, which have seen a change in ownership of a number of assets—the BP sale to Enquest that Tavish Scott raised and Shell sale to Chris Ior, are, and I quote, good examples of the free market working positively to ensure the right assets in the right hands. We read reports of calls for the state to buy ageing infrastructure to protect it until the sector picks up. However, as Lewis MacDonald accepted, the oil and gas authority, the industry regulator, was set up to ensure premature decommissioning of critical pieces of offshore infrastructure does not occur. The OGA that we have heard is also ideally placed to intervene, if necessary, to ensure maximisation of economic recovery from UKCS is achieved. The UK oil and gas industry is an incredibly bright future that is worth fighting for, but it needs championing by all of us in a position to do it. That is the job of government, that is the job of parliament, to listen to the experts, to listen to the industry and to judge and then act accordingly. It is not the role of government or parties to declare a solution in a vacuum. It was Tony Ben, who wrote in his influential volume arguments for socialism, published in 1979, that when he became Minister for Energy in 1975, the job of the then Labour government, he said, was to make sure that the resources of the North Sea were exploited for the benefit of the nation as a whole and not solely for the benefit of a handful of multinationals controlled mainly from America. Oil and gas was and is a natural asset and a national asset, and I think that for most of the era of North Sea oil and gas exploration, we have been far too modest in the demands that we, the people, have placed upon some of those corporations. That 1974 Labour government knew that oil and gas was a strategic resource, important for our whole industrial base, and that demanded a strategic public ownership approach through both the British National Oil Corporation, the BNOC, and through the offshore supplies office, designed to grow our own oil equipment industry. Of course, history records, as Stuart Stevenson has already mentioned, that the BNOC was auctioned off in 1982 and swallowed up by BP six years later, and the offshore supplies office was effectively choked off by the European community's 1992 single market rules and eventually laid to rest seven years later. I raise this sense of history because the idea that we are debating this afternoon of strategic intervention in our oil and gas fields to benefit the UK's industrial base and jobs is not entirely new. In the last few days, we have heard that Covernor has landed the 19.3 million decommissioning contract for BP's miller platform, and we know of other decommissioning contracts already heading to the fiords of Norway and the breakers' yards of Turkey. That is why it is obvious, at least to the Labour Party and the trade union movement, that a planned approach to decommissioning is more urgent than ever, and the Scottish Government needs to step up to this challenge now, not simply with a £5 million decommissioning fund, but with an economic plan and an industrial strategy to go with it. I am grateful to Richard Leonard for taking intervention. At this point, I just want to highlight that the proportion of the work that is the very visible part, the top-side structures, is about 1 to 2 per cent of the contract value, and just to put that in perspective, we are doing very well in the bulk of the area of decommissioning already, the sub-C in particular. Richard Leonard. Yes, I accept that, but there is no getting away from the fact that a lot of the decommissioning and deconstruction work that is taking place is not being landed in yards in the UK. That should be a shared goal across the whole of the chamber. There has been a crash in the industry beyond doubt and that the workers in the industry have been asked to pay the price of the collapse in oil prices internationally is clear for all to see. If you look, as I sometimes do at the Scottish Business Insider top 500 list, if you go back to 2013, Total, Suncore, Chevron, The Wood Group, Apache, Tarkar, MERSC, CNR are all in that list. If you look at this year's list, most of those are not just outside the top 20, they are outside the top 250, but it is worth considering that The Wood Group is still 12 and it was able to pay out a 10 per cent dividend to shareholders in 2016, which is precisely the same amount that cut the real living standards of its own workforce in 2016 and injustice, which would have been much worse, but for the campaign waged by the trade union movement. I want to end by saying that this idea of a public stake in offshore assets is better value for money than across the board tax cuts and to those in the industry and on the Tory benches who argue that it should be left to the free market, to private enterprise, to market forces. I say this, try telling the 120,000 people who have lost their jobs in the industry that it should be left to market forces. That's why I'm happy to support Lewis MacDonald's motion this afternoon. The last of the open speakers is Ross Thompson. Thank you, Deputy Presiding Officer. I would also like to thank Lewis MacDonald for bringing this debate before the chamber this afternoon. The oil and gas industry has experienced a brutal downturn in the last two years. It has been spearheaded by a sharp fall in the oil price. There are even fears among analysts this week that the price could plummet to below $30 a barrel. This consistently low price has led to falling revenues and investment and subsequent job losses. The global competitiveness of the United Kingdom continental shelf has been severely impacted by this, and we have seen the adverse consequences of that across the north-east economy. That being said, we have seen some encouraging signs of recovery. The industry has stepped up and faced these challenges head-on, and I wholeheartedly welcome industry efforts to galvanise itself and innovate. As the North Sea basin becomes increasingly more complex, it is encouraging that production has increased by more than 10 per cent in the last two years and substantial industry efficiency gains have driven a 45 per cent drop in operating costs. Just last week, I met with Deirdre Mickey of Oil and Gas UK with my colleagues in Aberdeen. From that meeting, it is clear that the UK continental shelf and our oil and gas sector more broadly have a future worth fighting for. There remains an estimated 20 billion barrels of oil and gas to be recovered in the North Sea, providing the UK with a secure supply of primary energy, as well as the economic benefits associated with a world-class domestic supply chain that supports hundreds of thousands of highly skilled jobs, technological innovation, manufacturing and exports. Industry efforts are a welcome step in securing the renaissance of the sector, but we recognise the important role that is played by the Government to support the north-east economy and create a more attractive and sustainable investment climate. The UK Government has rallied to that cause. A raft of measures were announced in April 2016 to boost the UK oil and gas industry, including reducing petroleum revenue tax to zero, slashing the supplementary charge to 10 per cent and providing further 20 million of funding for a second round of seismic surveys. We have created the most competitive sector specific tax regime in the world. The Scottish Government must also fully step up to the plate in order to secure the industry's future. The Scottish Government must ensure timely delivery of its share of Aberdeen City region deal. It must improve transport links between Aberdeen and the central belt. It must increase support for apprenticeships and skills in the industry, and it must create a business-supportive environment for industry to flourish. In my own experience of being in Aberdeen as a councillor and a member of the Parliament, having listened to industry across a variety of sectors, I gently say to the Government that too often the Scottish Government rejoices when asked to take photographs, but recoils when asked to take action. We need to see more action in the north-east of Scotland. Stuart Stevenson, in his contribution, mentioned securing our energy security. Again, very gently, I would say to him that in one of the ways that we can do this is that the Scottish Government got on and allowed fracking to happen here in Scotland. Deputy Presiding Officer, the Scottish Conservatives are committed to championing the UK oil and gas industry nationally and internationally. We are motivated to collaborate with all stakeholders, regulators and investors to guarantee that the UK continental shelf is, and shall remain, for a long time to come, open for business. I am delighted to close this debate and to respond to the many points that have been raised. I thank Lewis MacDonald for raising the issue and for the constructive tone in which he opened the debate. The Scottish Government's focus is on stimulating growth, protecting and creating jobs, and promoting Scotland is a great place to do business. I am sure that members are probably tired of hearing us saying that, but it is worth stating. The oil and gas industry is a very important part of that vision. We recognise the challenges that are faced by the oil and gas industry, posed by the global fall in oil prices, and we are doing everything within our devolved powers to support the industry and its workforce through these challenging times. We are fully supportive of the tripartite of the industry, the regulator and the Government working together to maximise economic recovery. The scale of job losses that members have touched upon has been significant over the past two years, and we acknowledge that, with estimates of 120,000 jobs lost across the UK and 46,000 in Scotland alone. The industry continues to support 330,000 jobs across the UK, with 124,500 of those in Scotland. It is crucial that the highly skilled oil and gas workforce is protected. In the face of challenging global conditions, the industry and, crucially, its workforce and the trade unions, which members have referred to, must be commended for their significant efforts in adapting to the new environment. Ten new fields came on stream in 2016, despite the troubles that the industry has faced. While unit operating costs in 2016 were expected to be around 45 per cent lower than in 2014, as Ross Thomson referred to. Scottish production increased by 21.4 per cent in 2015-16, so that is focussing on the areas of the adjacent territorial waters to Scotland, and North Sea production is expected to continue to rise over this year and next. I have certainly had that confirmed by conversations that I have had with some of the key upstream companies. Although it is not by no means job done, and I do not want to, in any way, appear complacent at all, there are encouraging signs that the industry is beginning to emerge from the downturn. For example, the latest Aberdeen and Grampian chamber of commerce's oil and gas survey found that around two-thirds of firms felt that the sector was nearing the bottom of the cycle with around half of those feeling that the bottom had already been reached. Recent merger and acquisition activity in the North Sea demonstrates the attractiveness of the basin and the continued appetite for investing in North Sea assets. To pick up the point that was made by Mike Rumbles earlier on and Tavish Scott in relation to the asset transfers, we see it as a positive thing that the assets are getting in the right hands for specialist companies that can make best use of late life assets and ensure that they be maximised economic recovery. That allows companies that have disposal of those assets to move on and focus on areas where they have their own specialisms as well. It is estimated that around 10 per cent of assets transferred ownership over the past year indeed, and it is crucial that assets are in the best hands, as I say, in order to maximise economic recovery. That is very much in line with the OGA's approach. I commend the OGA, as a number of members have, for being a very positive force in what has been tough times for the industry. Over the longer term, up to 20 billion barrels of oil and gas remain in the North Sea. Our draft energy strategy reaffirms our strong commitment to the oil and gas industry in Scotland and the positive role that the sector will continue to play for decades to come. The Scottish Government remains committed to maintaining domestic oil and gas exploration and production and maximising economic recovery, and for the first time, our energy strategy clearly articulates that within the context of our climate change objectives. To find a role for the industry in a low-carbon transition, and to pick up a point that I have made with Mr Leonard on a number of occasions, to ensure that there is a transition for those working in high-carbon to low-carbon in the future. However, the energy job task force continues to be an influential forum, and I want to thank all the members of the task force for their work, because it has been a great example of collaboration and action. Our £12 million transition training fund has already directly supported now over 1,600—I'm afraid that the website is not up to date for Ms Bailey—and 1,600 individuals have been made redundant as a consequence of the downturn in the oil and gas industry. In addition to more than 700 further individuals who are being helped through two formal training procurement rounds, the latest of which I announced on 10 February in Aberdeen. Significant business innovation and resilience support, as well as support for diversification and internationalisation, is being delivered through our enterprise agencies. The Scottish Enterprise published its decommissioning action plan on 21 December 2016 on our behalf. The plan shows that the Scottish supply chain has been very successful in securing much of the high-value decommissioning work-to-date, particularly in well-plugging and abandonment, but that is not confined to that. We are very pleased to see that that work is being secured. However, we have also announced a decommissioning challenge fund that will make available £5 million in 2017-18. I appreciate the points that have been made in relation to the overall scale of that resource. It is a targeted bit of resource at this stage of the process to help to identify advances that can be made in areas such as salvage and disposal and to help to promote work by ports and harbours to identify what infrastructure investment they may need to bring their facilities up to stand. I make the point and reiterate the point that there is still a lot of money, but it is 1 to 2 per cent of the total contract value for decommissioning, so we should not lose sight of the fact that the industry is doing very well in capturing much of the market that is already there. However, we want to try to secure as much of the total market as we can, so I pick up the point that we want to see investment where we can do so in facilities to secure port side activity and to see the disposal of the top sides being done in Scotland if possible. However, the fund will help to incentive the supply chain and encourage a strategic approach to make the most of the natural advantages and existing activities at our ports. It has been warmly welcomed by the industry and the oil and gas authority. I commit to members that we are working very closely with them. While the UK Government's recently published industrial strategy was limited in its recognition of the oil and gas sector, perhaps because it is an early stage of the process, the Scottish Government stands ready to support efforts by the industry and the regulator in working up plans for a sector deal for this vital sector alongside other sectors such as renewables. The key fiscal levers to support the oil and gas industry are reserved to the UK Government. However, the cabinet secretary for finance and constitution wrote to the Chancellor of the Exchequer ahead of the autumn statement outlining what we believe the Scottish Government priority measures should be introduced to support the industry. First, while there have been some welcome reforms to decommissioning tax relief over the years, it has not gone yet perhaps far enough in our view, and the Chancellor needs to resolve this by enabling the transfer of tax reliefs with asset sales. Addressing barriers to late life asset transfers would help to build on recent deal activity and ensure that the right assets are in the right hands, as I described earlier. I will live with that. Lewis Macdonald Thank you very much. I know that the minister will be familiar with the Pricewaterhouse Cooper document that I mentioned. Does he agree with those industry leaders who suggested in that survey that the Government might become an equity player in the field of decommissioning, as indeed in the fields of infrastructure, management and critical equipment hire? Paul Wheelhouse I am certainly aware of calls of that nature, and we have had discussions with other financial partners as well and investors who are interested in that area. I know that the UK Government has also looked at the potential for public sector intervention in this respect as well. We are open to ideas, and certainly we look through the energy strategy to get views from industry and trade unions and others as to perhaps options that we could take forward to certainly welcome any input to the Labour Party and other parties in this chamber wish to make to the energy strategy of ideas that will be constructive, and we will look at them with an open mind. Secondly, key to this debate is the need to protect critical pieces of infrastructure. The Scottish Government recognises and welcomes the role of the oil and gas authority, as I said, and its powers to intervene if necessary. However, the Scottish Government has for some time pushed for the UK Government to complement that, allowing the oil and gas industry to access Government loan guarantees. While the commitment was made, a welcome commitment at the March 2016 budget, one year on there have been no further details as yet, and despite assurances from the Treasury. We would hope that a successful guarantee scheme would negate the need for potentially costly direct intervention in the sector, which is not yet supported by the industry itself. We will be listening, but we need to listen to the industry, too. We think that measures such as that may well help to overcome the barriers that I think genuinely the Labour Party is trying to overcome on behalf of the industry. Finally, we have also called for further fiscal reforms to increase investment and stimulate activity and exploration. In 2016, there were only 15 exploration wells and eight appraisal wells completed. This year, the number of exploration wells drills is expected to remain static, although I have, to be fair, heard some more encouraging noises from some particular companies looking to expand exploration in the near future. There is also an exploration tax credit in Norway, and Norway has twice as many exploration wells as it had in 2015, so we have seen the benefit of that measure being put in place in Norway. Just to conclude, we believe that the UK Government should introduce measures to support exploration activity, which together with initiatives such as oil and gas authorities, seismic programmes and the £180 million oil and gas technology centre, which I was very proud to help to launch alongside Andrew Dunlop recently in Aberdeen. Having been supported by both Governments, it will help to ensure that the 20 billion barrel potential of the North Sea is realised. Importantly, a point that has been touched on by members, the global supply chain opportunities identified by MERUK and OG and oil and gas UK can be realised. The Scottish Government was disappointed that the Chancellor has ignored our calls to date and the autumn statement failed to introduce any new substantive measures, but we continue to liaise with UK ministers and through the forums available to us, continue to make those points. We hope that the March budget will provide another opportunity for the Government to provide vital support to an industry, which has contributed, let us not forget, over £330 billion in revenues to the Exchequer over the last 40 years and continues to play a very vital role in our economy. Finally, I can pick up the point that Lewis MacDonald made and give my own condolences to David Dawig's family and his friends and colleagues for all the work, and thank him for all the work that he did and recognise his role. The meeting is suspended until 2.30 p.m.