More than 10,000 engineering jobs could have been created if contracts to build North Sea oil rigs had gone to British companies instead of South Korean ones, it has been claimed.
In a letter to MPs, Dennis Clark, chairman of British oil rig maker Offshore Group Newcastle (OGN), warns that the country’s manufacturers will go out of business if the government does not insist that North Sea oil operators buy components from them.
He claims that in the past two years, only 7% of new platforms for the region were made in Britain. OGN analysis suggests that a total of 209,000 tonnes of fabrication structures have been awarded outside the UK in the past two years.
The company employs around 4,000 workers, which has fallen from a peak of 30,000, and is one of only four oil rig manufacturers left in Britain.
Mr Clark states: “Over the past two years, fabrication contracts for North Sea development worth in excess of £10billion have been placed overseas. It is estimated that more than 10,000 jobs would have been created in this country had these contracts been placed in the UK.”
OGN expressed anger that the Treasury granted Norwegian Statoil tax concessions to develop the Mariner and Bressay fields in the North Sea but did nothing to suggest that British companies should be used. Norway requires oil companies to use local suppliers for its offshore and oil and gas projects.
Mr Clark continued: “The UK is the only oil and gas province without a positive policy favouring local content.
“Norway has operated such a policy with great success for 30 years and it has filled its own fabrication capacity.”
But the government insists that European Union rules would not allow it to enforce such guidelines.
Sajid Javid, economics secretary to the Treasury, said: “The North Sea is a vital national asset, with oil and gas production supporting a third of a million jobs. That is why this government has announced a range of tax measures expected to generate billions of new investment and create jobs.”
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