North Sea industry should look to Opec for good news, not Chancellor Philip Hammond, an energy finance expert said today.
Colin Welsh said the absence of extra support measures for the oil and gas sector in today’s Autumn Statement was “disappointing”, but was likely to be a sign of things to come.
Mr Welsh, head of international energy investment banking at Simmons and Co, said it felt like North Sea industry had been left to ride out the downturn “on its own”.
Mr Welsh said: “Philip Hammond has been boxed in by the fact he thinks the economy won’t grow as quickly and that borrowing levels will be higher. He must have felt he did not have enough flexibility to provide further support.
“It’s disappointing because the longer the downturn goes on the worse things get, but obviously oil and gas is not at the forefront of his mind.
“He’s got Brexit and the debt levels on his mind more than anything.
“Anything to do with energy is not rising to the top of the agenda and it’s difficult to see that changing in the near future.”
Mr Welsh said the sector’s ability to recover would depend, to a large extent, on Opec’s ability to agree to production cuts at a meeting later this month.
He said: “It feels like North Sea industry can’t go a whole lot lower. But whilst I do agree the recovery is overdue, I think it could still be a long time coming unless Opec get its act together and cuts output at the end of the month.
“If it does, that will accelerate the recovery.”