Sir Ian Wood defends cash pay

North Sea reforms recommended in the Wood Review could become law within weeks
Sir Ian Wood

Sir Ian Wood charged to the defence of the new Oil and Gas Authority (OGA) yesterday, saying big pay deals for its bosses were essential for attracting the best talent.

The former Wood Group chairman and chief executive hit back at criticism of the OGA over £150,000-plus salaries for its top team.

It was Sir Ian’s Wood Review of the oil and gas industry last year that paved the way for the new regulatory body, which is now taking shape around chief executive Andy Samuel.

In his blueprint for maximising economic recovery for the UK North Sea amid stiff global competition, Sir Ian said a new regulator with broader skills and capabilities was needed to “significantly enhance” co-ordination and co-operation in the industry.

Yesterday, he said: “The OGA has a more important role than we than we all ever envisaged, given the way oil prices have gone.

“It is vitally important that they get some really good people on board.”

Sir Ian said the previous regulatory function of the Department of Energy and Climate Change had become overburdened and ill-equipped to meet increasingly complex challenges.

He added: “There is now a need for a completely new culture and they have to get very good people involved.

“You are just not going to get the quality of people required unless you pay them well.

“It is just sticking your head in the sand to say the salaries are too high.”

Sir Ian said he was impressed by the speed with which the OGA, which becomes an executive agency on April 5, was moving forward, adding: “The (UK) Government has moved as fast as it possibly could.

“They have brought in some good people, including a really good chief executive, and the industry has been very supportive.”

The new regulator would play key role in helping the sector address some “pretty basic problems which need to be sorted out,” he said.

Oil and Gas UK chief executive Malcolm Webb said: “Exactly a year ago, Sir Ian Wood set out his recommendation for a new shared strategy for maximising the economic recovery of the UK’s oil and gas resources.

“The creation of a new, well-resourced, arm’s length regulatory body to oversee and develop this programme of change and growth is fundamental to this strategy.

“It was recognised as crucial that the new regulator would be able to attract and retain people of the right calibre.

“All within the industry and government accepted Sir Ian’s recommendations, as did all major political parties.

“It is also important to note that the overwhelming majority of the cost of the new regulator will be paid for directly through a levy on the industry.”

Mr Webb added: “I have every confidence that Andy Samuel is approaching the selection of his leadership team with acute awareness of both the employment market and the current cost challenge the industry is facing.

“However, if the OGA is to succeed, it needs to be able to attract top professionals to these posts – and for that it must offer market relates salaries.”