LABOUR has insisted the need for an intergovernmental summit on the future of the North Sea oil and gas industry is even more pressing following the remarks of the de facto leader of Opec that the oil producers' cartel will not cut production even if the price falls to $20 a barrel.
In the past few months, the price of oil has nearly halved from the peak of $116 in June and remains around $60 a barrel. Already firms are laying off people with fears the numbers of job losses in one of Britain's most important sectors could reach tens of thousands.
Last week, one senior industry executive claimed the oil and gas sector was "close to collapse" with the prospects for future exploration harmed by such a low oil price.
Danny Alexander, Chief Secretary to the Treasury, said that while falling oil prices were good for consumers because of lower fuel costs, it was "deeply worrying" for those who worked in the North Sea industry.
He also pointed out how the SNP's overblown predictions of an oil boom, should Scotland become independent, had been exposed, noting how the SNP's predicted £6.9 billion windfall in 2016/17 would, on current prices, have produced one of just £500m, leaving a "gaping chasm" in Scotland's coffers.
Scottish Labour has accused the SNP Government of being caught unawares by the fall in the oil price and its implications for Scotland, which accounts for around half of the industry's 375,000 workforce.
In response, the SNP administration has insisted that the UK Government should take more of a lead in helping out the industry through things like tax breaks.
The immediate plight for the sector has been underscored by Ali al Naimi, Saudi Arabia's oil minister, often regarded as the most influential figure in the energy industry, who made clear Opec would not cut production even if a barrel of oil fell to as low as $20.
He said: "As a policy for Opec - and I convinced Opec of this, even Mr al Badri (the cartels's secretary general) is now convinced - it is not in the interest of Opec producers to cut their production, whatever the price is. Whether it goes down to $20, $40, $50, $60, it is irrelevant."
Mr al Naimi, whose organisation has 12 member countries includi Kuwait, Saudi Arabia and Libya, added that the world might never again see the oil price back at $100 a barrel.
His remarks alarmed the Labour leadership. A senior source said: "This makes Labour's call for an oil summit as early as possible in the New Year even more urgent.
"Both the UK Government and the Scottish Government have to respond positively to real concerns expressed by Aberdeen Council and the industry about the impact low prices are having on the North Sea sector."
Opec producers believe the oil price could return to about $70 or $80 by the end of 2015 as global economic recovery boosts demand but the concern is what happens to the industry in the meantime. Union leaders have called for a crisis management approach from political leaders in London and Edinburgh.
At the weekend, Jim Murphy, the Scottish Labour leader, Ed Balls, the Shadow Chancellor, and Jenny Laing, the leader of Aberdeen City Council, called for the UK Government to bring forward urgently a strategy to increase investment in the North Sea oil industry.
Calling for the SNP Government to provide an assessment of the long-term impact of a falling oil price on the sector, Lewis Macdonald, the Shadow Scottish Business and Energy Minister, said: "Oil workers deserve to know what the future holds for their industry. It's time for some action from the SNP Scottish Government."
Last night, a spokeswoman for the Scottish Government made clear that a representative from the SNP administration would attend an oil summit being organised by Aberdeen City Council in the New Year.
Until a date was fixed, she explained, it was impossible to say who would attend but it was possible the person representing the Scottish Government could be the First Minister, Nicola Sturgeon, herself, if diaries permitted.
It has already been made clear that Alistair Carmichael, the Scottish Secretary, and his Liberal Democrat colleague Willie Rennie, the Scottish party leader, have agreed to attend the Aberdeen Council summit on the North Sea industry's future.
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