Brexit uncertainty could mean ‘missed opportunity’ for North Sea oil

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Uncertainty surrounding Brexit could result in a “missed opportunity” for the North Sea oil and gas industry, MPs have been told.

Westminster’s Scottish Affairs Committee heard concerns that leaving the EU could have an impact on investment and access to high quality goods and staff for the industry.

A panel of experts offered their opinion on the future of the North Sea energy sector

A panel of experts offered their opinion on the future of the North Sea energy sector

The committee was taking evidence from a panel of experts at the Oil and Gas Technology Centre in Aberdeen as part of an inquiry into the future of the industry.

Asked about the potential impact of Brexit, the centre’s chief executive Colette Cohen said the industry had to consider the potential cost of leaving the EU and whether it would impact on competitiveness.

She said: “The biggest challenge for the industry over the next year and certainly one we’re experiencing now is the uncertainty.

“The industry is a global market, they will make whatever market they are in work or they will withdraw, but uncertainty creates that missed opportunity, whether it’s a missed opportunity in investment right now in the North Sea, whether it’s growth in their current business, whether it’s the ability to secure a contract in another country because of that uncertainty of what the terms may ultimately be in another year.

“That is the part that is impacting us and that is the part that needs to be sorted out as quickly as possible.”

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Professor Paul de Leeuw, director of the Oil and Gas Institute at Robert Gordon University, added: “Where we see particularly the biggest issue on Brexit from an oil and gas perspective, and I do not make a political point here, is round the potential impact between what is currently in place and going to WTO (World Trade Organisation) tariff arrangements.

“We see that as having quite an impact on the supply chain in terms of additional cost.

“The other one... is access to high quality resources and particularly people, either EU citizens or non EU citizens.”

Highlighting that about 10 per cent of people working in the industry fell into those categories, he added: “They are in high value jobs and this industry is relying on access to equipment, is relying on import of goods and services, relying on exporting goods and services and on people so the main thing the industry needs in my view is absolutely frictionless access to it and continuous arrangements in place.

“Our Vision 2035 relies to a very large extent on exports and actually doing more activities overseas.

“We need investment particularly in the next few years in the North Sea before the North Sea potentially declines in production post-2020 and actually having investment coming in here, less uncertainties and people not saying ‘I’m going to wait to see what plays out’ is going to be critical for this industry.”

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