Bank governor says North Sea firms may see more difficult times ahead
Scotland’s North Sea oil sector may have to deal with challenging conditions for some time, the governor of the Bank of England has warned.
Mark Carney said that, while the industry had presented an “impressive” response to the prolonged slump in oil prices, it remained in a “difficult” position.
He was speaking after the latest report from industry body Oil & Gas UK said that 120,000 people working in the North Sea are thought to have lost their jobs over the past two years.
However, it also revealed oil and gas production rose by 10.4 per cent in 2015 – the first increase in 15 years.
Mr Carney said that, while he did not want to underplay the difficulties facing the industry in the current climate, the “reaction of the North Sea oil and gas sector has been impressive”. He said: “It has been impressive in terms of reductions in costs. Amid dark clouds, there have been some rays of sunlight.”
But he cautioned: “It is a challenging environment and, given global prices, that may persist for some time.”
He also said it was still “early days” following the vote to leave the European Union, but that Brexit was “slowing the economy”, with companies examining their options.
“Scottish businesses are having to think through the potential nature of the future relationship with Europe,” he said.