The UK’s oil and gas trades bill could nearly double to £1.1billion a year in a worst case post-Brexit scenario, the North Sea industry has warned.
Association body Oil and Gas UK has highlighted the concern over the potential sky rocketing costs in a letter to Prime Minister Theresa May.
It comes after a study looked at the possible implications for the sector when the UK leaves the European Union.
Around £61billion worth of oil and gas related trade is related to goods which may be subject to tariff.
OGUK said under the current ‘status-quo’ with the UK as part of the EU, the total cost of this trade in goods is around £600million per annum.
But the study found that if the UK reverts to World Trade Organisation rules with the EU and the rest of the world, the likely cost of trade will almost double to around £1.1billion per annum – assuming trading behaviours remain unchanged.
However the study claims that if the UK can negotiate minimal tariffs with the EU and improved tariffs with the rest of the world, the total cost of trade could fall by around £100million per annum to £500million.
In regard to labour movements, the data showed that 90% of oil and gas workers are UK nationals. The remaining 5% are EU workers from countries other than the UK and 5% are non-EU citizens.
OGUK’s study found 70% of the EU workers in the industry are skilled, with one in two holding managerial roles
OGUK claims that these skilled roles filled by EU workers are often critical for projects and is asking the UK Government to consider these posts when developing domestic immigration policy.
The industry body has made three recommendations to government, which it claims should be prioritised during Brexit negotiations.
They are: frictionless access to markets and labour, maintaining a strong voice in Europe and protecting energy trading and the internal energy market.
OGUK chief executive Deirdre Michie said: “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.”
The government has been contacted for comment.