No coherent plan for UK oil and gas industry, Unite warns

UK’s workers’ union Unite has called for the government to create a strategy for the offshore oil and gas industry, highlighting the importance of a growing offshore decommissioning industry, as well.

According to Unite, Tommy Campbell, Unite the union regional officer and chair of the Offshore Co-Ordinating Group will on Tuesday give evidence to the Scottish Affairs Committee at Westminster on the future of the oil and gas industry.

“Unite has repeatedly criticised offshore oil and gas companies for using the recent downturn to impose regressive working practices across the North Sea. The industry moved quickly to cut pay and holiday entitlement and increased shift rotas following a sharp drop in the price of oil,” the union said.

The price of a barrel of oil fell from between $110 and $120 during 2011-2014 to around $25 a barrel in early 2016. More than 160,000 direct and indirect offshore jobs were lost between 2014 (463,900 jobs) and 2017 (302,200 jobs) as a result of the downturn. Oil and Gas UK estimate that the sector seen revenues fall by more than £10 billion from 2014 to 2016. However, the price of oil recently hit $80 a barrel for the first time in four years. It is projected by global analysts that over the coming months the price could hit $100 a barrel, Unite said.

The Union has said it will call upon the UK and Scottish governments to strategically plan and coordinate in the sector in order to extract the up to 20bn barrels of oil and gas estimated in the UK Continental Shelf to ensure maximum economic recovery. The union has said it will also repeat its calls for a national decommissioning strategy as activity in Scotland over the next 10 years could be valued at between £8.3 billion and £11.3 billion – supporting peak employment of 16,925 to 22,775 jobs.

In its submission to the inquiry Unite has called for the following:

• For the Oil and Gas Authority (OGA) in cooperation with the UK and Scottish governments to initiative strategic public stakes in the offshore sector including infrastructure investment (e.g. pipelines) through discussions with government, industry and trade unions to facilitate co-investment;
• The UK and Scottish governments to use borrowing powers and national investment banks to enact the strategic public stakes to support the sector in dialogue with the OGA;
• The full devolution of employment law, full control over skills and apprenticeships.
• For the UK and Scottish governments in consultation with local authorities, industry and trade unions to initiate a comprehensive national decommissioning strategy;
• Further research to assess employment prospects, the skills gaps, and shortages in the UKCS in the context of Brexit and the degree of transferability of skills to the emergent decommissioning sector.

Tommy Campbell, Unite regional officer and chair of the Offshore Co-Ordinating Group, said: “The oil and gas sector continues to be a major employer and contributor to the UK economy – and it will be so for generations to come. It is a sector of national interest and security; it cannot be left to the vagaries of the market. We have seen the devastating effects of this approach over the last few years and this can’t be allowed to happen again.”

“The UK and Scottish governments must step in now to strategically support the sector to ensure we secure maximum economic recovery of the potential $20 billion barrels in the North Sea, and to plan for the gradual phasing out of wells through a national decommissioning strategy. Unite remains deeply concerned that across the UK there is no coherent plan to address the present and future challenges for the Oil and Gas sector.”