Progress for Aberdeen with £250m City Deal and trading deal with Mozambique

Posted On: 28th January 2016

A major new injection of cash into North East Scotland’s economy has been announced with the signing of a new UK City Deal fund of up to £250m.The agreement will be Scotland’s second UK City Deal, following Glasgow’s arrangement agreed in 2014, and will again see equal funding committed by the UK and Scottish Governments. aberdeen_3950429Med

The City Deal will address a number of proposals from the region including a new energy innovation centre, supporting the industry to exploit remaining North Sea reserves, as well towards the expansion of Aberdeen harbour, enabling the city to compete for decommissioning work. The City Deal also sets out how the region will diversify the biopharmaceutical and agri-food industries, diversifying the area’s economy and creating new jobs and export opportunities, as well as commitments to improve digital connectivity across the area.

Secretary of State for Scotland, David Mundell, said:

“Oil and gas is a crucial sector, not just for the North East of Scotland but for the whole of the UK. I know it’s a very tough time for people who work in the industry and their families, and I am determined that the UK Government will do what it can to support them.

“We need action which will help in the short, medium and long terms – building a bridge to the future of the North Sea; helping the UK’s oil and gas industry to export its world-class expertise around the globe; and encouraging diversification of the economy to create new opportunities in other sectors too.

“This UK City Deal will help deliver that and demonstrates our commitment to this very important part of Britain’s economy. We have seen in Glasgow the extra jobs and growth that this kind of deal can bring, and I want to see the same achieved in and around Aberdeen.

“I also very much welcome that the Scottish Government has decided to match our funding and work together with us on securing a better future for the North East of Scotland.”

Mr Mundell is also to visit Mozambique, as part of a move to forge a new trading partnership between Aberdeen and the town of Pemba. The city has longstanding links with Mozambique and has been driving forward partnerships between the country and oil and gas companies in the north east of Scotland.

However, it wants to build on that with a formal memorandum of understanding between Aberdeen and Pemba, which is in the north east of Mozambique, underpinned by an action plan designed to help Pemba create a local oil and gas hub based on the Aberdeen model.

Mozambique contains huge reserves of offshore natural gas, and is expected to become a major global producer in coming years. Aberdeen City Council has been awarded a £120,000 grant from the Foreign Office to help draw up the action plan for the Pemba hub.

The action plan will help boost much-needed growth and investment in Mozambique. It will also open up significant opportunities in consulting, supply chain, logistics and training for British companies, particularly those based in Scotland.

The Aberdeen oil and gas hub model, built on lessons learned from 40 years of North Sea operation, sets the highest standards in governance, transparency, value for money, quality and environmental responsibility.

As well as opening up opportunities for British companies supplying the north sea oil and gas sector, the scheme will also help Mozambique develop its extensive offshore oil and gas resources.

Councillor Jenny Laing, Leader of Aberdeen City Council, which has been driving the Pemba initiative said:

“I very much welcome the visit to Mozambique by David Mundell. It will help reinforce the commitment of the UK to supporting Aberdeen and its industries.

“There are huge opportunities in the oil and gas fields off Mozambique and this link between Aberdeen and Pemba will help the government there develop their potential, while providing opportunities for companies here to export their products, protecting and creating jobs in the north east and beyond.”

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