European Union plans to take regulatory control of the North Sea industry would be more damaging to oil and gas operators than a spill, according to analysts.
Credit rating agency Fitch said although the Elgin gas leak revealed investors were “increasingly alarmed” about the risks involved in the sector, European health and safety measures would make energy firms less attractive investments.
Pointing to the fall in Total’s share price – more than £5billion was wiped off the company’s value in the days after the leak started – Fitch said: “This reaction illustrates investors heightened sensitivity to offshore oil and gas exploration and production activity.
“Fitch Ratings believes, however, that the real risk facing the offshore oil and gas industry that would potentially have the greatest rating impact could instead come from the ensuing EU regulatory response rather than a more remote risk of another catastrophic multibillion-dollar offshore accident.”
The agency said the European Commission proposals included obligations for operators to set aside cash to deal with potential spills, which would lead to it downgrading oil and gas firms’ ratings.
Robert Paterson, health and safety director at industry body Oil & Gas UK, said: “If, as Fitch suggests, companies may also find themselves restricted financially as a result, this could have a negative effect on jobs and the industry’s contribution to the country’s economy – not to mention jeopardising potential recovery of the UK’s remaining 24billion barrels of oil and gas.”