Sector News

The UK’s new energy secretary pledged to put the North Sea oil and gas sector “at the heart of the UK’s industrial strategy” as he ruled out intervening in an ongoing industrial dispute.

Greg Clark, who was made secretary of state for a newly formed Department of Business, Energy and Industrial Strategy (BEIS) by Prime minister Theresa May last month, also confirmed that he would hand full legislative powers to the oil and gas watchdog in weeks.

On his first visit to the oil and gas capital, Mr Clark said the merger of the former Department of Energy and Climate Change (Decc) into the Department of Business, Innovation and Skills (Bis) was “emblematic” of government’s approach to the sector.

He was asked how he would persuade readers of Energy Voice that oil and gas sector is important to him and the newly formed BEIS – considering the sector is facing one of the biggest jobs crises in UK industrial history.

He said: “It is absolutely of vital importance, not just to Aberdeen and the north-east but to the whole of the UK.

“If you think of the strengths that we have in oil and gas – quite apart from the exploration and production in UKCS – the services that are produced right around the world by companies and individuals based here in Aberdeen, it is literally a world beating industry.

“To think of it as an important part of our industrial strength as a nation shows why bringing energy back into strong focus in industrial policy is a big step forward for the sector.

“It was right to bring energy and climate change together. The next logical step is to make it at the heart of our industrial strategy.

“Our industrial strategy should take a long term view of where we can compete around the world.

“The strengths we have in oil and gas are a good example of the types of industry we are best at and where there are big opportunities.”

He denied the UK government betrayed a lack of support for oil and gas after a string of energy ministers – six since the coalition government took power – have been in place, pointing to tax changes and the establishment of the Aberdeen City and region deal.

Yesterday, he also confirmed that the Oil and Gas Authority (OGA) would become a wholly devolved agency – moving from being a transitional executive agency to an autonomous government company – on 1 October.

He said: “If you look at some of the reforms that have been made to the tax treatment of the UKCS, if you look at the implementation of the Wood Report…

“I announced today that we are going to divest with powers the new agency on the 1 October which comes directly out of that.

“You have had a commitment during the five years of the coalition and over the last year of conservative government, which is very much drawn on the advice and the coming together of the industry here in the north-east.

“If you take the City Deal, something that is very important – a quarter of a billion pounds invested in the technology institute to make sure we are at the cutting edge.

“These show the commitment to and the importance of the sector.

But he said he would not intervene in the increasingly rancorous North Sea industrial between Wood Group and up to 400 striking offshore workers.

“It is a commercial matter for the company and their workforce,” he said.

“No one wants to see industrial action like this.

“I hope both sides will be able to come together and resolve their differences so the very committed workforce that the North Sea has always had and that Aberdeen and other places across the country have supplied can be contributing to what is a very important industry.”

It is not the first time Mr Clark has been involved in the energy brief.

He was made shadow energy minister in 2008 by then leader of the opposition David Cameron. Following the formation of the coalition government in 2010, he was made a minister in a new role overseeing decentralisation.

He added: “I am thrilled as a former shadow energy secretary of state now to be back here in Aberdeen to take this forward explicitly in the industrial strategy.”

“One of the most exciting parts of the appointment, to have the chance to put our energy policy and the oil and gas sector right at the heart of the UK’s industrial strategy – it is an emblematic move.”

“I used to come to Aberdeen quite a bit when I was the shadow energy secretary. It is nice to be re-engaging with the industry.

“There are challenges that come from a low oil price. But actually when you have challenges like that, that is the time for the industry to come together, to work with government and to plot a course for the long term future.

“There is commitment to having a long term industrial strategy for the country – I think dovetails very well with what is needed for the oil and gas sector for Aberdeen.”

By Erikka Askeland

Source: Energy Voice