The UK oil and gas industry is missing out on a government funding pot worth more than £7billion because it has failed to sufficiently organise itself, a business leader warned yesterday.
Paul Warwick, boss of oil operator Talisman and a member of the government and industry-led Technology Leadership Board (TLB), said the sector has missed out on financial support for technology development from the Department for Business, Innovation & Skills (Bis) because it was “too complicated”.
He added that, until recently, the industry had not needed the help from government.
Today the industry is hoping that the UK government will signal a reverse in recent tax hikes and even a tax reduction in the face of spiralling costs and collapsing oil prices in the Autumn statement.
Speaking at an event hosted by trade body Oil & Gas UK yesterday, Mr Warwick said that there was surprise when TLB members heard how much money was available to help other UK industrial sectors thrive.
He said that the £7.4billion the governments spends to help other industries was “mindblowingly, staggeringly high”, adding:
“Part of the reason it doesn’t come to our industry is we aren’t organised to call upon our share of that kind of funding”.
The meeting at the Aberdeen Exhibition and Conference Centre (AECC) also heard how the UK aerospace sector was benefiting from a £2.1billion Aerospace Technology Institute, an initiative jointly funded government and industry.
Gavin Campbell, Director for Aero Bombardier, said that his industry had formed a “genuine partnership” with the UK government, which saw the benefits to employment and international competitiveness of supporting the industry in a number of ways.
He said|: “We [the UK] are the largest aerospace industrial sector in Europe, that places us second behind the US.”
He said the sector faced threats from the rise of rivals in emerging markets in China, Brasil and Russia.
“There are a lot of countries investing heavily at the moment trying to grow very fast. That is a significant threat to us. That was a key part of getting goverment’s attention.”
It is thought that the UK oil and gas sector has had support from just 5% of the Bis research technology development budget.
Mr Warwick, the Executive Vice President of Calgary-based Talisman, added that the TLB would “absolutely” like to see a similar institute established for the energy sector, but said his board was still in its “infancy”.
He said: “What has historically been a successful basin with relatively low operating costs and conventional ways of doing things, we haven’t necessarily needed that help.
“When our basin started to struggle, we didn’t know what the government offered but I think it was fair to say the government didn’t understand the industry.”
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