Energy boss claims North East hit by contracts failure

THE Government’s failure to insist multi-billion pound contracts create UK work has cost the North East 1,500 jobs, a leading firm claimed last night.

THE Government’s failure to insist multi-billion pound contracts create UK work has cost the North East 1,500 jobs, a leading firm claimed last night.

Ministerial indecision has seen international oil firms allowed to overlook UK interests and snub job pleas, the chair of offshore oil and gas firm OGN said.

The firm, based in Wallsend, North Tyneside, said a major contract to drill for oil in UK waters was handed to the company Statoil with no condition work on offshore rigs was kept in Britain.

As a result, a multi-billion pound contract for platforms which will be used in UK waters was handed to a South Korean firm.

OGN, one of just four oil platform manufacturers left in Britain, said it has faced Government indecision at every step, resulting in a missed opportunity to create jobs.

Company chairman Dennis Clark said the entire fabrication sector is “getting no help from our own Government”.

He warned that over the last two years alone, contracts worth more than £10bn have been awarded overseas, with some 10,000 jobs lost nationally as a result.

“We have brought this matter to the attention of several ministers,” Mr Clark said, “including George Osborne, Vince Cable, Sajid Javid, Charles Hendry and John Hayes. The matter seems to fall between the Treasury, the Department for Energy and the Department for Business. Everyone is interested but no one will take decisive action.”

He added: “Tax concessions are offered to North Sea oil and gas producers, but the UK Government provides taxpayers’ money without requiring anything from the recipients.

“The Government says it cannot intervene, but we appear to be the only country that adopts this stance.”

The call for change was last night supported by former regional minister Nick Brown.

The Newcastle East Labour MP has already asked the departments for energy and business to clarify their position.

He said: “We want to have a strong onshore fabrication sector working on these projects in the North Sea. The work is there and the Government should do more to help make sure the work is carried out in the UK.

“The British taxpayer will pay a premium on the energy generated, there should at the very least be some UK employment.”

A Government spokesman said: “We are working hard to ensure the UK remains at the cutting edge of this global industry. The UK has a competitive and successful supply chain for the oil and gas sector, sustaining more than 200,000 jobs across the UK.

“Our subsea and engineering sectors are world-renowned and offer very competitive services to oil and gas operators.

“The fabrication industry is having particular success in winning contracts to build small and medium-sized structures.

“Two recently approved projects, Cygnus and Solan, will be constructed in the UK with the jackets that support the platform and rig hardware made in the North East of England and Scotland, supporting several thousand quality jobs.”


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