UNCERTAINTY caused by the Scottish independence referendum could temporarily halt investment in the North Sea oil and gas industry, the Coalition Business Minister has warned.
Michael Fallon told a conference: "My fear is that it will pause investment. That's a very big worry."
Last year, there was £14 billion of investment in the UK's oil and gas sector.
The latest North Sea licensing round is under way, which ministers hope will generate the same level of interest as it did last year when a record number of licences were awarded.
While, overall, oil and gas production off Scotland continues to decline, Whitehall is confident the North Sea has massive reserves. First Minister Alex Salmond is even more confident, estimating they are worth £1.5 trillion.
Ed Davey, the Energy Secretary, is expected to support industry demands for tougher rules, requiring companies to work together to maximise the recovery of oil and gas from existing fields and new finds. This week, he is due to receive a report from Sir Ian Wood on how this could be done. Last year he said improved regulation could boost the economy by £200bn over 20 years.
Mr Fallon said a key issue was decommissioning ageing infrastructure.
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