Thursday 28 January 2016 9:56 am

Aberdeen handed £250m government fund as oil price continues to fall

One of the UK's most oil-focused cities has been handed a £250m fund by the government, as the price of oil continues to fall.

This morning the government announced a £250m UK City Deal fund, which will support North Sea explorers to exploit reserves.

The fund will also be put towards expanding Aberdeen harbour, meaning local companies can compete for decommissioning work – and will also be put towards a new energy innovation centre.

“Oil and gas is a crucial sector, not just for the North East of Scotland but for the whole of the UK," said Scottish secretary David Mundell, who signed the deal today.

"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."

Oil prices rose above $32 per barrel yesterday, after Russia hinted it would consider curbing production. However, prices are expected to stay low. On Monday the World Bank cut its 2016 oil price forecast to $37 per barrel, down from the $51 it expected in October.