British Energy Minister Ed Davey last night ordered Andy Samuel - the newly-in-post chief executive of the Aberdeen-based Oil and Gas Authority - to identify key risks to oil and gas production in the North Sea oil and gas industry and to 'identify what further measures might be taken by government and industry to mitigate them.'
This is in the light of the recent very dramatic falls in global oil prices and is complementary to the strategic work which the newly-established Oil and Gas Authority has been set up for by the British government.
Samuel has been told to deliver his report by 28 February – which is ahead of the next UK Budget, which would therefore, allow UK Chancellor George Osborne to take the findings of this report into account and, if necessary, announce any reductions in UK taxes on North Sea oil in the subsequent March Budget.
Davey said, "The oil and gas industry is used to volatile prices in world markets and will get through the latest downturn as it has in the past. However, given the huge value of the UKCS to the nation and the relatively high cost base that it has, I am concerned to make sure that it does so in the best possible shape for the future and well placed to deliver our goal of maximising economic recovery as set out by Sir Ian Wood.
"I have therefore asked Andy Samuel to undertake an urgent piece of work, involving industry, to come up with practical measures to mitigate the immediate risks that the downturn in prices presents us with. There is a lot at stake and I know that industry leaders will lend weight to the work that I have asked Andy to do."