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Clash of the Cabinets: Cameron goes offshore (and still won't debate FM)

David Cameron has visited an oil and gas platform as the focus of the Scottish independence debate shifted to the future of North Sea production.

The BP Etap platform
The BP Etap platform

The Prime Minister was flown to a BP installation 150 miles (240km) east of Aberdeen ahead of a Cabinet meeting in the city this afternoon.

He toured the Etap platform as the UK Government set out its commitment to supporting oil extraction for decades to come.

Downing Street has warned that an independent Scotland would be less well-placed to invest and to withstand oil market volatility.

The Scottish Cabinet, led by Alex Salmond, was, meanwhile, gathering for its own meeting in Portlethen, just outside Europe's oil and gas capital.

The First Minister has promised to base part of the Scottish energy ministry in Aberdeen if there is a Yes vote on September 18.

The meetings came as retired oil executive Sir Ian Wood published a report that addresses the issue of declining production.

It contains a series of recommendations which he says could ensure three to four billion extra barrels are recovered from the North Sea over the next 20 years, generating more than £200 billion for the UK economy.

North Sea oil production began in about 1975 and an estimated 40 billion barrels have been extracted to date.

The Etap, or Eastern Trough Area Project, began operating in 1998 and comprises nine oil and gas reservoirs.

From a peak of 140,000 barrels of oil a day in 2000, it currently produces around 30,000 to 40,000.

The oil is exported via the Forties pipeline to Grangemouth and Etap's gas is transported by the Cats pipeline to Teesside.

An investment programme is under way to extend the platform's production from 2026 through to 2030.

On his first visit to a North Sea oil platform, Mr Cameron met BP regional president Trevor Garlick and well engineer Ann Davies.

The UK Government has said it will implement Sir Ian's recommendations, including the creation of a new independent regulator to supervise licensing and 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.

The UK Government claims that the country's large consumer and tax base will allow it to support the industry and help exploit the increasingly hard-to-reach oil and gas reserves.

Downing Street said tax revenues from oil and gas in 2012-13 were £4.7 billion lower than the previous year - a drop of more than 40% and a sum it says equates to more than a third of Scotland's health budget or two-thirds of its spending on education.

The Scottish Government has already put forward plans to establish two separate oil funds if there is a Yes vote in September's referendum - one short-term fund to help deal with fluctuations in oil and gas revenues, alongside a long-term savings fund.

Mr Cameron's visit lasted just over an hour before he was flown back to Aberdeen.

He said: "Because we are a top 10 economy we can afford the tax allowances, the investment, the long term structure that is necessary to make sure we recover as much from the North Sea as possible."

The Prime Minister said of the decision to hold a cabinet meeting in Aberdeen: "I've always believed in taking the cabinet to every part of the United Kingdom.

"We've met across England, we've met in Wales, now we are meeting in Scotland. I think it's good to get the cabinet members out and about, talking about issues that people care about, and coming to Aberdeen to see what a vital industry this is in our United Kingdom."

He said on the independence issue: "I profoundly believe the United Kingdom will be better off if we all stay together.

"We all bring things to this United Kingdom and I've been very clear to say on behalf of the rest of the United Kingdom to the people in Scotland we want you to stay.

"We think that we'll benefit by you being in the United Kingdom, by keeping this family together, but in the end the choice has to be for people in Scotland.

"It's their choice, they will make it, but I think it's important to lay out all the arguments of the benefits of staying together."

Asked why Mr Cameron would not debate the independence issue with Mr Salmond while he is in Scotland, the Prime Minister's spokesman told a daily Westminster media briefing: "This is a debate and a vote amongst the people of Scotland.

"As the Prime Minister has said, he doesn't have a vote, and that is why - as I think the Secretary of State for Scotland was reiterating yesterday - the question is 'Is Mr Salmond willing to debate with Alistair Darling?' "

He added: "The reasons why the Cabinet is in Aberdeen today very much relate to the North Sea oil and gas industry and the arguments the Government is making in respect to that industry."

The spokesman was unable to say whether the idea of taking the Cabinet to Aberdeen had originated with the Prime Minister, but told reporters: "The point is that it is a very good idea."

He added: "The Prime Minister regularly visits all parts of the UK, including Scotland, and I am sure that will continue."

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