‘Lack of clarity over deal damaging to oil and gas’

Energy industry experts say sector will not emerge unscathed

The oil and gas industry was last night warned it will feel the hit of increased costs in retaining skilled workers as a result of Theresa May’s “unclear” draft Brexit deal.

Analysts said a lack of clarity in the document was “disturbing for the sector” which, despite being global, is “not immune” to the effects of Brexit.

Oil and Gas UK said it welcomed the publication of the long-awaited withdrawal agreement and will reassert its priorities to the UK Government in the coming days.

David Gibbons Wood, a business and economics lecturer at Robert Gordon University, described the uncertainty as “damaging”.

He said: “The reaction of the industry is similar to that of the average person in that they will be asking themselves when do we get to know where we stand?

“It’s bringing even less certainty than we had before. We don’t know if we will be leaving the customs union and it’s asking more questions than are being answered which I think will be disturbing for the oil and gas industry.

“I think businesses will react quickly once they understand the trading environment but uncertainty is very damaging.

“The agreement should bring clarity but Theresa May’s deal hasn’t done that.

“I think the oil and gas industry can take some comfort in the fact it is a global industry and not just an EU one.

“Oil and gas will not be as affected in the same way as the fishing industry from EU regulations.” Fiona Cincotta, a senior analyst at City Index said nothing will stop the sector from being affected by leaving the EU.

She said: “The oil and gas industry requires highly-skilled and mobile workforce. Given that Brexit, with or without Theresa May’s deal, looks to restrict movement of people between UK and EU and vice versa the impact on the sector could be large, especially in an industry where competition for talent is fierce.

“Skilled European workers won’t be lost but the increased cost of keeping them, hiring them and the administration involved will be felt.”

Oil and Gas UK said it will be taking time to properly assess the implications of the deal.

Chief executive Deirdre Michie said its focus was on “securing the best outcome for the UK’s offshore oil and gas industry”.

“That is, protecting the offshore industry from future EU regulatory changes, minimal friction between the UK and EU, maintaining a strong voice in Europe, protecting energy trading and the internal energy market and protecting our licence to operate,” she said.

SPECIALISTS: Skilled European workers will still be available but it is expected the cost of hiring them and the admin will have an impact