UK Offshore Body tells Govt its Brexit Deal Hopes

The trade body for the UK offshore industry Oil & Gas UK (OGUK) has sent the prime minister analysis it had commissioned of the potential impact and opportunities that the decision to take the UK out of the European Union – Brexit – will have on the sector, it said May 3.

It told Theresa May in a letter May 1 that OGUK would welcome discussions with government officials to outline industry’s concerns and opportunities and help identify a path forward during Brexit negotiations.

The research by international consultants EY has assessed the value of oil and gas trade, fuel and non-fuel, between the UK and the rest of the world at around £73bn ($94.4bn), of which five sixths are related to traded goods, which may be subject to tariffs; the rest is services.

Under the current ‘status-quo’ scenario with the UK as part of the EU, the total cost of doing this trade in goods is around £600mn/yr, less than 2% of the total value of trade subject to tariffs, it said,

If the UK is unable to secure better terms and trades under World Trade Organisation rules, the likely cost of trade will almost double to around £1.1bn/yr, but if the UK can negotiate minimal tariffs with the EU and improved tariffs with the rest of the world, then the total cost of trade could fall by around £100mn/yr to £500mn.

On labour movement, the data show that of those directly employed by the oil and gas industry in the UK, 90% are UK national, 5% are EU workers from countries other than the UK and 5% are non-EU. Around 70% of the EU workers in the industry are skilled, with one in two holding managerial roles, and these skilled roles filled by EU workers "are often critical for projects and asks government to consider these posts when developing domestic immigration policy," it said.

OGUK said it recommends that the government aims for frictionless access to markets and labour; maintaining a strong voice in Europe; and protecting energy trade and the internal market.

(Credit: OGUK)

OGUK boss Deirdre Michie (pictured, above) said the trade body was apolitical but it commissioned the research to understand the possible impact and opportunities that Brexit would bring. She said: "We also identified other EU policy issues as critical to the oil and gas industry and will require negotiation with European counterparts, as well as discussions at the domestic level between government, regulators and industry during the Brexit process.

“Our request of government is that any change, whether domestic or European, is managed in a manner that minimises risk to the oil and gas industry and provides predictability and clarity wherever possible, through constructive dialogue and consultation.”

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