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Scottish city official calls for finance deal amid falling oil prices

Xinhua, February 3, 2015 Adjust font size:

British politicians, industry and union representatives met on Monday in Aberdeen in northeast Scotland on measures to protect local oil and gas industry amid plummeting oil prices.

At the meeting, which was organized by Aberdeen City Council, City Council leader Jenny Laing urged ministers to back a 2-billion-pound (about 3 billion U.S. dollars) finance deal for the city with a combination of government grants and borrowing powers to secure the region's economic future.

For too long Scotland's oil and gas sector had been seen as a "cash cow". With the fall in oil prices, it was now time for "pay back", Laing said at the Aberdeen Exhibition and Conference Centre.

Scottish First Minister Nicola Sturgeon said the Scottish government officials were already in discussion about the city council's proposals and she was "keen to continue to take that forward".

For his part, Scottish Secretary Alistair Carmichael, who also attended the meeting, said that government at all levels must work together with industry to deliver for the people who live and work in a city region.

The British Treasury said it was working with industry leaders "as a matter of priority" to address the challenges the oil and gas industry faces.

Malcolm Webb, Oil and Gas U.K. Chief executive, called for "meaningful action" from government in order to tackle major challenges facing North Sea operators.

He believed "an unpredictable and harmful business environment" has put the sector "at great risk".

Amid falling oil prices and rising costs, participants at the meeting also called for urgent tax cuts, and put in place a new oil and gas regulator as soon as possible.

As many as 35,000 oil and gas industry jobs could be cut in the next five years, according to a report commissioned by Oil and Gas U.K., industry skills and safety body Opito and the British Department for Business, Innovation and Skills.

Jobs could fall from 375,000 to 340,000 in the oil and gas industry by 2019, said the report released in early December.

The Brent crude oil prices dropped from its peak of 115 dollars per barrel last summer to 53 dollars per barrel on Friday. Endit