A strategy to secure even more future investment and jobs in the oil and gas industry has just been unveiled by the government.

Thursday 28 March 2013

The Department for Business, Innovation and Skills (BIS) has just unveiled a new action plan to encourage even more investment in the UK oil and gas sector over the next few years, leading to more and more opportunities for contractors in the sector.

The Oil and Gas Industrial Strategy: Business and Government Action Plan sets out a number of strategies designed to create jobs and draw in billions from companies looking to exploit the UK’s energy resources.

Since as much as two-thirds of the country’s energy needs will probably be met with coal even into the 2040s, the report says, maximising domestic supplies is also a sensible step towards securing a stable supply when fluctuation in the markets may make importing resources more difficult.

Chief among the plan’s proposals was the continuation of a tax regime which is already credited with drawing in record levels of investment. As the Treasury announced in last week’s Budget, tax relief for decommissioning plans will be guaranteed, while the existing system of tax breaks is set to remain in place.

However, the deal also looks towards the supply chain. More than 1,100 supply chain companies achieved combined revenues of around £27 billion last year in the UK, according to the government’s figures.

Fabrication has been identified as a key sector of concern. Although there are British fabrication yards bidding for international business, most contracts from the UK Continental Shelf (UKCS) have recently gone to foreign yards with considerably lower operating costs.

BIS’ primary goal will be to have the UK supply chain comprehensively mapped to identify its strengths and weaknesses, from which it will draw up a plan to ensure that investment raises standards across the board and UK supply chain companies can expand and even internationalise. The surveying process is expected to be completed by the end of the year.

Of course, plugging the well-documented skills gap in the energy sector is also high in the government’s priorities. Industry will work alongside BIS to establish a national programme training ex-military personnel to make the switch to oil and gas.

Further training for skilled graduates and professionals will also be provided through the Neptune National Centre for Subsea and Offshore Engineering, for which Newcastle University has just been awarded £7 million.

When it comes to providing businesses with access to funding, the energy sector will be among the major industries working with the government to shape the role of its new Business Bank, while the much-touted Funding for Lending scheme is expected to play its part for smaller businesses.

While training and recruitment may eventually reduce the demand for contractors in the energy sector, expanding businesses are still likely to draw upon the specialist knowledge and experience of skilled contractors. More and more opportunities will continue to appear in an industry which shows no signs of slowing down.

“The UK’s oil and gas industry is a vital strategic resource that helps fulfil our energy needs and insulates us from volatile global markets,” said business secretary Vince Cable. “By partnering with industry to support oil and gas investment offshore and onshore, the coalition government aims to boost growth and enhance the UK’s energy security.”

By Victoria McDonnell

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