The North Sea Oil and Gas industry is facing one the largest challenges in its history with a confluence of negative market factors pushing its role as part of the UK’s Energy sector and one of the countries largest employers to the brink and the decommissioning supply chain is the latest to feel its effects.
Will Rowley – interim CEO of Decom North Sea, recently surveyed its UK membership and the figures made very grim reading. “Without government intervention and immediate fiscal stimulus, the entire supply chain for the UK Decommissioning sector is in jeopardy” – Will conceded.
“After speaking with all of our members, over 10,000 people working in this sector will be at risk of losing their employment, without immediate government help.”
“The reality is that unless Operators are able to access funds to start their planned decommissioning projects, there will be very little activity for our members. This means the UK will lose its exceptional expertise in this field and miss out on the substantial global opportunities to execute the projects. “
The Scottish government has called on the UK government to urgently release a portion of the £12.9 billion it holds for decommissioning tax relief to save jobs in North East Scotland and across the UK.
HMRC estimates that it will repay around £12.9 billion to operators in taxes, previously collected due to decommissioning tax reliefs. Despite increasing job losses in the sector due to the global health pandemic and economic crisis, the Treasury is yet to take decisive action to support the sector.
Will feels strongly that if the sector can access liquidity quickly, there could still be a very bright future for the sector due to the strong international demand for UK decommissioning capability.
“If we can find a mechanism that works for all parties to stimulate the sector quickly, then I am confident that once projects start to get underway, we will be able to leverage our international relationships and start a flourishing export market for the UK supply chain, with large markets such as Malaysia and India already showing great interest, but time is critical in this matter and we need action soon”
Will continues to work hard with Decom North Sea to raise awareness of the implications to the sector at government level and hopes that the UK government will give their answer very shortly.
Read the latest issue of the OGV Energy magazine HERE.
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