David Cameron vows to bolster North Sea oil and gas industry

Ms Sturgeon has called on the UK Government to use March’s budget to cut North Sea taxes and ease pressure on the industry.

The Scottish Government has offered to fund the deal on a 50:50 basis to support innovation, digital connectivity and infrastructure.

Aberdeen City and Aberdeenshire councils submitted a bid for a deal worth £2.9bn over two decades a year ago.

He is also expected to announce further UK Government measures to protect jobs.

In September, Oil and Gas UK estimated the number of people employed across the British sector fell by 65,000 since January 2014, with Scotland thought to have been worst hit by the cuts.

Yesterday he told MPs: “The oil price decline is the longest in 20 years and almost the steepest and this causes real difficulties for the North Sea”.

“The Scottish government is taking action to support the industry at this hard time, but this needs to be matched by a commitment from the UK Government to address the fiscal regime in which the industry operates”, said Scotland’s First Minister Nicola Sturgeon in a statement following a cabinet meeting on the oil and gas sector. “I’m determined that we build a bridge to the future for all those involved in the North Sea”.

“Will you assure me that you recognise the seriousness of the situation and you’ll do all that you can to get the industry through these very hard times?”

Mr Mundell will also formally announce plans for a formal memorandum of understanding between Aberdeen and Pemba, in the north east of Mozambique, designed to help the city create a local oil and gas hub based on the Aberdeen model.

“We’re going to help the sector export its world-class expertise”.

He told the Commons on Wednesday he would be outlining ways to help the “vital industry at this vital time”.

Martin Kitts-Hayes, co-leader of Aberdeenshire Council added: ” Our teams have been working closely with both the United Kingdom and Scottish Governments to develop a deal that will support the oil and gas industry in Scotland, and also explore new opportunities for diversification and building on our reputation as an innovative place to do business.

City Deals are UK Government initiatives in which investment is targeted to boost local economic growth.