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Premier Oil's Catcher field obtained First Oil in December 2017 after successful installation of the Floating, Production, Storage and Offloading (FPSO) vessel. On January 24 2018, Premier Oil announced that its first export cargo of oil from the field was lifted and sold at a premium to globally traded Brent crude, in-part due to the recent rise in the wholesale price of oil. It is indeed welcome that the field is currently producing an estimated 20,000 barrels per day whilst final tasks are being carried out. Output thereafter is expected to reach 60,000 barrels per day in the coming months. This development will help extent the lifetime of the North Sea industry which currently supports an estimated 115,000 jobs in Scotland and helps meet the majority of Scotland’s and the Uk’s primary energy needs.

There have been a number of industry reports showing that confidence is returning to the oil and gas sector. The most recent report, DNV-GL shows that, over the past year, confidence in the likelihood of growth in the sector has more than tripled in the UK, to 61% from just 18%.

This is further evidence that, while we must continue to be careful to avoid complacency, the North Sea oil and gas industry is experiencing signs of recovery, and has a bright future ahead. With up to 20 billion barrels of oil equivalent remaining, it's clear that a renewed focus on innovation and technology can help maximise economic recovery and ensure the sustainability of the North Sea oil and gas industry for the future.

Our work to date to support the sector is seeing us invest £90 million in the £180 million Oil and Gas Technology Centre, and through further funding for research, innovation and skills development for the sector means that Scotland is now very well placed to capitalise on this investment domestically and in export markets, with opportunities for workers and businesses throughout Scotland’s oil and gas supply chain.

Ultimately, though, there are still significant challenges facing the oil and gas industry, and there will need to be continued vigilance on continuing cost pressures, so we are using our devolved powers to support the industry and its workforce through these challenging times, in driving innovation to deliver sustainable efficiencies, as well as pressing the UK Government – who can access the full range of policy levers – to do more to meet the needs of the sector.

We have always maintained there are significant opportunities remaining in the North Sea, even in the context of a low carbon transition, and that a strong and vibrant domestic offshore oil and gas industry will play an essential role in the future energy system we set out in our recently published Energy Strategy.

As Minister for Business, Innovation and Energy, I meet regularly with key operators and supply chain companies in the sector and details of engagement with businesses in the sector are set out in the proactive release of Ministerial meetings . The Scottish Government’s refreshed Oil and Gas Industry Leadership Group, which I co-chair, provides another opportunity to have direct engagement with the sector.

However, it is important to note that our Enterprise Agencies, on behalf of Scottish Ministers, continue to work closely with Scottish companies to provide support and advice, and other assistance, to help businesses access international markets, including: the identification of market opportunities; market intelligence and strategy support; identification of business partners and finance options and the facilitation of connections and business relationships. We remain committed to working with the supply chain to be a key driver of competitiveness in the north sea and internationally.

North Sea oil and gas production across 2018 is forecast to be the highest since 2010, reaching an estimated 1.9 million barrels per day, as outlined by global energy consultancy Wood Mackenzie. Major projects predicted to come onstream in 2018 such as Mariner and Clair Ridge will drive this increase.

These projections are in line with the sentiments expressed in the recent Oil & Gas UK (OGUK) 2017 Economic Report and Aberdeen, Grampian & Chamber of Commerce (AGCC) 27th Oil and Gas Survey, and DNV-GL oil and gas industry outlook 2018, which highlight the return of confidence to the sector.

The exact impact of the increase in production will depend on a number of factors, including the oil price, costs, and demand, but all else equal should benefit Scotland’s economy.

(a) Exports: The majority of oil and gas produced in Scotland is currently exported, and in 2016 the total value of crude oil, natural gas liquids (NGL) and gas exports is estimated to be £13.3 billion. In recent years, the value of exports has decreased while production has increased due to lower oil and gas oil prices.

(b) Economy: Oil and gas production is estimated to be worth £9.2 billion to the Scottish economy in terms of its economic impact, with this being the equivalent of 5.8% of total Scottish GDP, in 2016.

(c) Employment: Increased production will help support the 115,000 jobs supported by the industry here in Scotland and aid the sector in its return to growth after a number of challenging years.