The UK’s new energy industry regulator, the Oil and Gas Authority (OGA), yesterday insisted it was ready to become an executive agency on April 1 as planned. Oil and Gas UK (OGUK) chief executive Malcolm Webb had earlier suggested the fledgling watchdog had decided to delay the move, which will let it start fulfilling its role formally, for some months. The establishment of a strong and well-funded regulator was one of the recommendations made in last year’s Wood Review, which made a series of proposals aimed at maximising the recovery of UK fossil fuels.
Industry experts have given their perspective on what is happening in the sector, the price of oil, and the current challenges and opportunities there could be. It follows the announcement by a number of companies, including BP and Schlumberger, that job redundancies would be made across their global and North Sea operations. Graham Stewart, chief executive of Faroe Petroleum, said it would be the companies "with good growth prospect, strong balace sheets and good hedges in place who will ride this storm most effectively."
Wood Group PSN has been awarded a five year contract from BP worth an estimated $750million. The contract will deliver engineering, procurement and construction services to six UKCS offshore upstream assets and the FPS (Forties Pipeline System) onshore midstream facilities in Grangemouth. The contract win will create 150 new jobs and secure more than 700 existing positions.
The oil and gas sector is vital to Scotland and it is important we have the skilled workforce required to strengthen our overall ambition as a major centre for energy activity. The oil and gas UK study highlights the need for the UK Government to continue to put in place measures to sustain long-term investment in the UKCS and for industry to work with our colleges and universities to ensure they are delivering the skilled workforce they need and deliver the best value out of the public investment that we provide for the training of the current and future workforce. But unfortunately the Autumn Statement last week failed to provide the oil and gas industry with the tax measures it both requires and deserves.
We watched yesterday's Autumn Statement from the Chancellor George Osborne, with feelings of hope and trepidation. We understand the economic constraints under which today’s Autumn Statement is delivered and there’s consensus in our offices this afternoon that the immediate reduction of two percentage points in its tax rate is an important first step towards improving the fiscal competitiveness of the UK North Sea – but, without question, more needs to be done.