AN INQUIRY into the oil and gas industry by MPs may consider the need for the UK Government to help small offshore operators hit by the credit crunch.
It follows growing concern about the prospects for oil and gas “juniors” facing severe problems securing the cash they need to continue.
The possibility of backing for a form of capital support scheme arose with publication of a formal call for evidence by the Commons energy and climate change committee, which plans to visit Aberdeen. One of the issues it will examine is the effect of the recession and the credit crunch on the industry, in particular on financing exploration and development.
Angus MP Mike Weir, the SNP’s energy and business spokesman and a member of the committee, said larger operators were already cash-rich and “any capital support scheme would have to be limited to the smaller players”.
The difficulties faced by the industry as the oil price has fallen included the need to maintain its skilled workforce, Mr Weir said.
North-east Lib Dem MP Sir Robert Smith said the inquiry “will provide a welcome opportunity for the industry to focus the government’s mind on how crucial the North Sea is to the north-east and the UK economy”.
Concern about the smaller players started in November with a warning from accountancy group Ernst and Young that they had seen share pric-es tumble, leaving many in “near-critical” condition.
The committee’s call for evidence said views were particularly needed on how remaining offshore oil and gas reserves can be exploited most effectively and what steps are needed to unlock resources west of Shetland.
The deadline for submission of written evidence is March 4. An Oil & Gas UK spokeswoman said: “I can confirm we have been asked to give both oral and written evidence to the committee and we intend to do both.”