Oil and gas infrastructure may need to come into public hands if Britain is to maximise the North Sea’s remaining reserves, a leading oil boss has claimed.
Former BP head of exploration David Bamford said yesterday that running the energy sector like the rail network could be the best way to maximise recovery.
Sir Ian Wood’s review of the industry revealed that access to the infrastructure which brings oil and gas ashore is one of the biggest problems facing firms.
His final findings are expected to be published later this month, and he has already called for a new regulator to be given greater powers over such access.
But Mr Bamford – who now runs his own consultancy and sits on the board of Tullow Oil – has gone further. He said yesterday that the government may need to consider more radical solutions.
“I don’t know if it’s that you do something like the railways with the infrastructure,” he said, referring to the split in Britain between a state-owned railway network operator and mostly privately-owned train companies.
Oil and gas lawyer Bob Ruddiman, Aberdeen-based head of energy and natural resources at Pinsent Masons, said Mr Bamford’s suggestion “could be done”. But he warned that careful consideration would need to be given to the firms who took the initial “capital risk” to build the infrastructure.
Any kind of public firm move would be a throwback to the 1970s – when Energy Minister Tony Benn pushed for an
all-powerful national oil company.
Britain and Norway took very different paths in the development of the North Sea in the 1970s, with the UK initially using state-owned groups, such as the British National Oil Corporation and a partly state-owned BP.
These government stakes were sold off, while Oslo has kept a much tighter rein on its sector and built up a massive sovereign wealth fund.
Mr Bamford added: “I hate the idea of it being nationalised, but control of the infrastructure in the North Sea is key.”
Talking about falling production, he added: “This is urgent. It’s not a problem we can see happening in the next decade, it’s a problem now.”
Tony Benn’s British National Oil Corporation, set up in 1976, took some grip on the developing industry, but was a bystander with modest powers.
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