OGN boss calls for Government to help offshore fabrication industry

12.11.2015

He cited thousands of jobs that have been lost from the industry over the last five years.

 

Mr Clark said: “We’ve seen this happen time and time again now. The response Government give is that they can’t intervene because of EU rules, well that’s nonsense. It’s the tendering process that is flawed.

 

“These operators get the cheapest prices at the beginning, they’re seduced by it, but the tenders are only submitted on half finished drawings. Once the contract is awarded and under way it goes over budget and isn’t delivered on time.”

 

Mr Clark said the playing field must be levelled for UK firms as their overseas counterparts received state aid, despite not being profitable.

 

He is confident that operators could avoid price increases and delays by using UK skills to make sure preparatory engineering works were completed to a higher standard.

 

Mr Clark admits that he was part of the group that lobbied the Chancellor George Osborneto introduce generous tax breaks for North Sea oil and gas firms, in order to stimulate work.

 

He recognised those tax incentives were now costing the UK taxpayer without providing the indirect benefits to UK firms, and in cases where work was delayed, such as the Mariner project, tax receipts were also being delayed.

 

In Norway tax allowances are linked to project budgets, so those schemes that exceed budget do not receive incentives past that point. Mr Clark suggested a similar scheme should be considered in the UK.

 

He also said he was worried about investment prospects in the North Sea at current oil prices, which are averaging around $44 per barrel.

 

He added: “Investment is going to dry up at the current oil price if we don’t change our strategy. At the moment we’re waiting to hear if we’ve been successful in the Chevron Captain project, but beyond that it looks uncertain.”

 

The Journal approached the Oil and Gas Authority - the Government’s agency for the offshore industry - for comment but it did not respond.

 

 

Source: http://www.chroniclelive.co.uk/business/business-news/ogn-boss-calls-government-help-10417143

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