Prime Minister Andy Burnham faces a "defining moment" in the wake of this morning's announcement that BP is putting its North Sea business up for sale.
While the news rocks the region, BP is only the latest employer to seek to exit the North Sea on the back of years of uncertainty around policy, damaging taxation and conflicting information from government about the future of oil and gas in the UK.
While new PM Burnham has talked the talk about a "pragmatic approach" to the North Sea, this morning's announcement presents an opportunity for him to show he means what he says.
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: "Today's announcement from BP should be a defining moment for the new Prime Minister. How many more jobs need to be lost before the UK Government acts?
“This decision is another stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry.
"The Prime Minister has spoken about taking a pragmatic approach to the North Sea. He now has an opportunity to turn those words into action.
"That means delivering on the commitment to replace the Energy Profits Levy with the Oil & Gas Revenue Levy – which includes a permanent windfall tax mechanism that would apply when prices are high – well before 2030. It is imperative that we create a stable, long-term fiscal regime and ensure our regulatory system can approve investment at the pace required.
"The North Sea remains one of the UK's greatest strategic assets. It underpins our energy security, supports hundreds of thousands of skilled jobs and generates billions for the public finances. But unless investors have confidence that Britain is open for business, more capital, more jobs and more expertise will continue to leave.
"BP's decision should not be viewed in isolation. It is the latest signal that the UK is at a crossroads. The new Prime Minister has a genuine opportunity to reset the relationship with our offshore energy sector and restore confidence before more investment is lost.
"Industry is not asking for special treatment. It is asking for certainty, stability and a policy framework that recognises the continued importance of domestic oil and gas while we build the energy system of the future."
Announcing the planned sale, Meg O’Neill, BP’s Chief Executive, said: “The UK has been our home for more than 100 years and will continue to play an important role in our future. We’re proud of the jobs we create, the contribution we make to the UK economy, and the work we do to keep energy flowing every day.
“The North Sea remains integral to the UK's energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.
"It has world-class people, resilient assets and a proud heritage, and it is precisely these qualities that can attract an owner ready to back its next chapter. We are seeking an outcome that recognises that value.”
The decision forms part of BP's "ongoing portfolio review and reflects its disciplined approach to capital allocation".
The company statement added: "BP remains committed to operating the business safely and reliably throughout this process, while continuing to deliver for its customers, partners and stakeholders."
Last month, it was reported BP had held advanced talks with Ithaca Energy about selling its UK North Sea assets in a possible deal with almost £2billion.
BP is planning to cut 700 jobs as executives have warned of a "potential oversupply" of oil and gas, leading to lower prices in the coming months.
It's reported the cuts will apply to "non-frontline" roles.