No sector deal also means no delivery of Vision 2035, a former North Sea chief will warn today in evidence to the Scottish affairs committee at Westminster.
Trevor Garlick – BP’s regional president for the North Sea from 2010 to 2015 – will tell MPs that failing to secure an oil and gas sector deal will shatter hopes for £290 billion in extra revenue, as set out in the industry’s Vision 2035 document.
The successful delivery of Vision 2035 ambitions would see an extra 3-4 billion barrels of oil equivalent produced in the UK North Sea.
Proposals for an oil and gas sector deal are aimed at ecouraging industry investment in its supply chain, in order to boost competitive advantage and “deliver value”.
With all industries invited by the UK Government to set out sector deal proposals earlier this year, Mr Garlick said last night it was an ideal opportunity to build a UK offshore supply chain “fit for the future”.
He added: “Submitted to government in March 2018, our sector deal is designed to strengthen the long-standing partnership between the UK Government and the oil and gas industry, which was reinvigorated following the 2014 UKCS (UK continental shelf) Maximising Economic Recovery UK (MER UK) Review.
“Focused on upstream operations, this partnership has set the long-term strategic priorities for the sector, working with Oil and Gas UK. It has created an attractive fiscal regime, a new regulator and technology centre, and delivered some strong results during a difficult period.
“We must now focus on the opportunities for our multi-sector offshore supply chain.”
Mr Garlick said he was concerned that lack of investment in the supply chain would affect oil production and market growth.
He also warned that failure to achieve a sector deal could hinder the success of the MER UK Review, with knock-on consequences for the “low-carbon economy” and “digital revolution”.
“Without this deal or a similar focused intervention we will not deliver Vision 2035,” he said, adding: “We will not achieve the full potential of MER UK.”