GE deal to create up to 1000 jobs in UK energy sector
GE has reached an agreement with the UK export credit agency UK Export Finance (UKEF) to access export financing for up to $12 billion which could create up to 1000 new jobs in the UK.
GE says that this agreement will initially support both confirmed and potential orders in a number of international markets including Brazil, Ghana, India and Mozambique. As GE wins these orders, it will create up to 1000 new jobs in the UK in the energy sector.
Since 2003, GE has invested over $21 billion in the UK generating significant volume of exports. GE’s Oil and Gas Subsea Division alone exported close to $1.3 Billion to 54 countries in 2014. UKEF has been a valued partner in supporting export financing for GE customers, GE said.
“It will provide jobs and security for people working in the energy sector and elsewhere. It is a vote of confidence in our long term economic plan,” David Cameron said.
Under the terms of the memorandum with UKEF, GE has pledged ongoing support for its UK supply chain. In addition to providing export finance support, UKEF has agreed to add GE as a member of its Direct Lending Facility Partnership Panel which will allow the company to provide technical, commercial and financial solutions to our customers. UKEF is also offering GE a new ‘top-up’ support facility of up to $750 million, subject to individual project approval and due diligence. This will create an additional financial incentive for UK exports and assist GE customers to close on UK made products.
“We are doing everything we can to make Britain the best place in Europe to start, finance or grow a business and GE’s substantial commitment through this agreement is fantastic news,” said UK Prime Minister David Cameron. “It will provide jobs and security for people working in the energy sector and elsewhere. It is a vote of confidence in our long term economic plan.”
“I warmly welcome this exciting series of partnership opportunities with GE. UKEF is proud to be viewed as one of the most responsive and innovative export credit agencies in the world, as this new GE framework demonstrates,” said David Godfrey, Chief Executive, UK Export Finance said. “It is a good example of the many new opportunities for multinational companies operating out of the UK to work with us.”
“In today’s competitive environment, countries that have a functional Export Credit Agency (ECA) will attract investment. Export finance is a critical tool we use to support our customers. Without it, we can’t compete against foreign competitors who enjoy ECA financing from their governments,” said Jeff Immelt, Chairman and CEO, GE.
“We are fortunate to have the support of UK Export Finance (UKEF), one of the most flexible ECAs in the world. The UK is pro-export and pro-manufacturing.”
Since the U.S. Export Import Bank (Ex-Im) authorization expired July 1, GE has started talks with several foreign ECAs to secure financing for its customers. GE will continue to expand its operations in countries where official ECA financing is available. Just like the Ex-Im Bank, many ECA countries require that business production and jobs must be invested in-country to qualify for financing.
Oil & Gas UK welcomes GE’s announcement
Oil & Gas UK’s Business Development Director, Stephen Marcos Jones, commented: “We are delighted to hear that a memorandum of understanding was signed at Downing Street today (24 September) by GE and UK Export Finance, forming a cooperation framework on exports from the UK which may support up to 1,000 new jobs in the UK oil and gas industry. It is good news for the GE and will, we hope, have positive ramifications for GE’s entire oil and gas division.
“There’s acceptance throughout the UK offshore oil and gas industry now that collaboration is the way forward, a cooperation framework for exports is a great example of this. Earlier this month, Oil & Gas UK formally launched the Efficiency Task Force, a group tasked with driving pan-industry initiatives to encourage cooperation and focus on initiatives that add real value for our sector – helping the UK to compete globally. We’ll continue our focus on cooperation at Oil & Gas UK’s forthcoming Share Fair, where we’ll encourage an open dialogue between operators and contractors, providing an arena in which creative and entrepreneurial solutions to the challenges we face can be collectively forged.
“At home, over 43 billion boe have been produced to date from the UKCS and this success of our indigenous industry is directly linked to the success of companies throughout our supply chain. Maximising the recovery of our indigenous oil and gas resource will strengthen the country’s energy security, boost tax revenues, exports and the balance of payments, but it will also help sustain high value activity and jobs right across our world-class supply chain, which is a £35bn business in its own right.”