Brexit: what does it mean for the Oil and Gas Industry?

On June 23rd the UK voted to end its membership in the EU. ‘Brexit’ threatened to damage trade deals and the UK’s relationships with other EU member states. The North Sea Oil & Gas industry is heavily reliant on skilled workers from European Union countries a report has found, prompting calls for the Government to ensure the free flow of labour after Brexit.

The true cost of Brexit

With exit terms still to be negotiated, Oil & Gas UK commissioned a special report to help understand the possible impact that exiting the EU could have on the industry.

The report found the £600 million costs associated with oil and gas related business between the UK and European Union members could increase by £500m annually – or fall by £100m after Brexit depending on the outcome of trade talks.

Oil & Gas UK Chief executive Deirdre Michie explained that Oil & Gas UK was an apolitical body that could not take a position on Brexit. However, Michie has advised Theresa May that the Government should prioritise maintaining frictionless access to markets and labour in the Brexit negotiations to help protect an industry that has been impacted by the crude price plunge since 2014.

A light at the end of the tunnel

The prolonged global downturn that the Oil & Gas Industry has experienced in recent years has reduced investment levels and led to the loss of jobs throughout a shortening supply chain. The UK Oil & Gas Industry is starting to be more globally competitive again, but remains sensitive to additional burdens in relation to cost or restrictions on the movement of key personnel required for critical operations.

EU workers fill many highly skilled roles that are often critical for oil and gas projects. The report identified that five per cent of workers in the oil and gas supply chain come from EU countries outside of the UK. With 156,000 people reckoned to be working in the supply chain, EU countries provide around 7,800 workers. The bulk of which work in skilled positions – with one in two workers holding a managerial or professional role.

When developing post Brexit immigration policy, the Government should consider the important role of EU workers. While other priorities in Brexit talks should include protecting energy trading and the internal market and ensuring a strong voice for the UK in Europe.


May 19, 2017 | News

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