Theresa May’s government green paper on industrial strategy makes only two specific references to the UK’s struggling oil and gas sector.
The preliminary report from the Department for Business, Energy & Industrial Strategy lays out a framework of of government proposals designed to provoke discussion over future policy.
The paper, titled Building our Industrial Strategy, is designed to address “long term challenges” facing the UK economy by driving growth, increasing productivity and improving living standards.
In her opening remarks in the paper, the prime minister claims that a modern strategy is “critical” for a post-Brexit Britain.
But the terms “oil and gas” are only mentioned twice in the entire 132 page government document despite widespread job losses and the market struggling to survive on sub $60 Brent Crude prices.
In comparison, the word “nuclear” makes 13 appearances in the body of the report. “Renewables” appears three times in the text while the word “wind” appears four times excluding the reference pages.
The phrase “low carbon” is mentioned seven times.
In the first mention of oil and gas, the report’s author states that the UK must capitalise on energy industries to win a share of global markets.
The report goes on: “These include in manufacturing and services around clean energy, but also making the most of our strengths in areas in which Britain has a lead, such as nuclear decommissioning and offshore oil and gas, including in clusters of excellence such as Aberdeen and other industrial hubs on the east coast.”
The second time the phrase appears the author again makes reference to making the most of the UK’s “strong clusters”.
The report states: “From the oil and gas industry of Aberdeen and the digital clusters in northern cities, to advanced engineering networks in the Midlands or cyber security industry in the South West and South Wales, there are world leading businesses in each part of the UK.”
The report comes two years after the North Sea was forced to deal with the aftershocks of the plunging price of Brent Crude, which has nearly halved in value since June 2014.
And estimated 120,000 people associated with the industry have lost their job since the fall, according to industry body Oil and Gas UK.
A string of companies have since been mothballed.
Iona Energy, First Oil, Harkand Group among many other firms were all victims of the downturn.
Despite a lack of clarity on how the struggling sector will fit into the future industrial strategy, the publication of the report was welcomed by Oil and Gas UK.
Chief exectuive Deirdre Michie said: “We look forward to contributing to the consultation on the Industrial Strategy to ensure that Government policy recognises and supports the importance of the vital upstream sector to the UK.
“We are developers of cutting edge technology, providing highly skilled jobs, helping to power the nation and exporting to the world. Furthermore, with up to an estimated 20 billion barrels of oil and gas to recover, the UK offshore oil and gas industry still has enormous potential to drive this country’s growth.
“The sector has contributed over £330 billion in corporate taxes since production began and currently still supports around 330,000 jobs across the UK. Our supply chain is worth almost £30 billion and around 40 per cent of this is made up from exports.”
She added: “We welcome the focus on growing productivity, innovation and research and on managing the skills challenge. As a UK wide industry, with hubs from Shetland to Southampton, we also welcome the focus on regionalisation.
“We firmly believe that the UK needs a strong and vital indigenous oil and gas industry underpinning the UK’s economic prosperity.
“The current industry downturn is extremely challenging for many of our members and we believe the industrial strategy can be a lever to ensure that this economic success story survives and continues to underpin the UK’s economic prosperity.
“Oil & Gas UK will coordinate industry and stakeholders in building a case for a sector deal that help towards that aim, deepening and developing centres of excellence from technology and decommissioning to subsea.”
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