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Last Updated: Tuesday, 4 September 2007, 16:33 GMT 17:33 UK
'Hands off' warning to SNP on oil
Oil platform
The SNP has campaigned for decades on oil revenues
The Scottish Government will not be allowed to gain control over North Sea oil revenues, a UK minister has warned.

Before the election, the SNP said it wanted early talks with Westminster about the transfer of responsibility to the Scottish Parliament.

However, Scotland Office Minister David Cairns told an oil conference that the UK Government has "no intention" of devolving control of oil and gas.

It comes as analysts suggest production is down despite massive investment.

Introducing needless uncertainty into an 11bn industry which supports half a million jobs is not an option
David Cairns
Scotland Office minister

Mr Cairns delivered his warning during a speech at the Offshore Europe Exhibition in Aberdeen.

He told delegates: "The interests of both Scotland and the UK are best served through continued economic union and the benefits which accompany a UK-wide approach.

"Our thinking on this issue is therefore unequivocal - introducing needless uncertainty into an 11bn industry which supports half a million jobs is not an option for the UK Government."

In his report on the SNP's first 100 days in power, First Minister Alex Salmond said meetings over oil revenues were being sought - and that his administration was also investigating the arrangements Northern Ireland has on energy powers.

'Right decisions'

However, Mr Cairns warned that North Sea oil was a UK resource, the UK Government has "no intention of devolving oil and gas powers to Holyrood" and there was a "vast array of sound reasons" to block any bid to transfer control.

Speaking on BBC Radio's Good Morning Scotland programme, the Labour MP insisted: "If we make the right decisions today and tomorrow, we can maximise the benefits of the North Sea for the entire UK economy."

This is not just about income - it is a clear strategy that looks to the future, that seizes opportunities rather than misses them
Alex Salmond
First Minister

Mr Salmond said in Aberdeen: "Oil will remain an important part of Scotland's economy, but it is only one part of an impressive resource and economic hand Scotland can play.

"As important as oil is we have huge renewable potential, with Scotland having as much as 25% of the potential EU tidal and wind resource."

Mr Salmond said remmants of the oil industry could be put to new use.

He said: "Pipelines no longer required to carry oil have the potential to carry CO2 for storage. This is important in any decisions on decommissioning oil fields. These and other decisions on our energy future would - I believe - be better taken in Scotland.

"That is why we are starting discussions on how Scotland can have more responsibility for hydrocarbon development, and will not be deterred by the knee-jerk negativity of the Scotland Office.

"This is not just about income - it is a clear strategy that looks to the future, that seizes opportunities rather than misses them."

Output down

Meanwhile, the monthly Royal Bank of Scotland oil index puts the average daily output of oil in June at 1.263 million barrels worth 45.3m a day, or 6% down on the previous month.

Combined daily oil and gas production is put at 2.243 million barrels of oil equivalent worth 69m.

Although some of the decrease is for seasonal reasons, including summer maintenance shutdowns, the figure for oil alone is down 11.4% on June last year, and the combined oil and gas figure is down 12.9%

The bank noted: "The year-on-year decline in oil and gas production in the North Sea continued through June, despite near-record investment in 2006."

Alex Salmond and David Cairns at the conference

'Precedent' for oil revenue bid
04 Jul 07 |  Scotland
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