Cameron warns Scotland that oil investment plans require unity

The Prime Minister, who will chair a meeting of the Cabinet in Aberdeen, has accepted the main recommendations in an expert review of the industry that could result in an extra four billion barrels of oil being recovered.

Mr Cameron insisted that the “broad shoulders” of the UK Government were able to support investment in the industry, as Downing Street warned that volatility in the oil market could have a dramatic effect on Scottish finances in the event of independence, with the smaller economy less able to absorb the impact.

First Minister Alex Salmond will hold a separate meeting of his Cabinet in nearby Portlethen and has promised to base part of the Scottish energy ministry in Aberdeen if there is a Yes vote for independence on September 18.

The two meetings have been timed to coincide with the publication of retired oil tycoon Sir Ian Wood’s review, which recommends measures that could result in three to four billion more barrels being recovered, bringing in over £200bn to the UK economy.

The measures in the review, which the UK Government will accept and fast-track for implementation, include the creation of a new independent regulator to supervise licensing and to ensure maximum collaboration between firms to explore and develop oil and gas fields.

There will also be a joint commitment between Government and the industry to ensure licences are awarded on the basis of recovering the maximum amount of petroleum from UK waters.

It also recommends more sharing of infrastructure andl information and less red tape.

Mr Cameron said: “For many years the UK has supported the North Sea oil and gas industry and we have worked together to make this an economic success the whole country can be proud of.

“I promise we will continue to use the UK’s broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race.”