OEUK Chief Warns of ‘Industrial Contagion’

The Chief Executive of industry body Offshore Energies UK (OEUK), David Whitehouse, said in a statement sent to Rigzone recently that a new Westwood Energy report commissioned by OEUK “shows Britain faces a gathering industrial contagion”.

OEUK highlighted in the statement that Britain’s “homegrown oil and gas comes ashore via eleven terminals that are the backbone of its energy system” and said the new Westwood report “shows the real-world impact on these hubs of stalling investment in domestic oil and gas”. OEUK added that the study “shows the volumes UK terminals are handling, known as throughput levels, have declined by almost 40 percent since 2020, and without urgent reform of government policies will halve again by 2030”.

The industry body said in the statement that this is serious for firms and people across Britain.

“Not only because domestic oil and gas supports over 200,000 jobs, providing 50 percent of UK demand and contributing GBP 25 billion ($33.7 billion) to the economy, but because each terminal supports locally and nationally interlinked networks of companies and jobs in industries like pharmaceuticals and fuels,” OEUK added.

“They are also a key supplier of the UK’s chemicals industry, in which 130,000 people are employed and 60 percent of firms are reporting falling sales,” OEUK continued.

OEUK stated in the report that the rapid decline in oil and gas investment is threatening this integrated network.

“It risks beginning a domino effect as the premature decline domestic oil and gas impacts onshore terminals with knock-on consequences for wider industry,” it added.

“In turn, domestic oil and gas supply chains are critical to the build out of renewables and offshore wind and carbon storage projects in the UK,” it continued.

“OEUK’s 2025 supply chain report shows 40 percent of supply chain companies report a declining business environment, with almost 90 percent looking for growth opportunities outside the UK,” it continued.

In the statement, Whitehouse warned that “politicians of all parties need to recognize that what happens to North Sea energy doesn’t begin and end in Aberdeen”.

“It ripples through our industrial spine, across sectors and into Grangemouth, Humberside, Teesside, Tyneside, East Anglia and the North West. It undermines the homegrown manufacture of things like fuels, chemicals, and pharmaceuticals as well as our energy future,” he added.

“The UK needs oil and gas for decades to come, but uncertainty over oil and gas licensing in UK waters, combined with uncompetitive taxes means imports are rising and investment in domestic production is stalling,” he continued.

Whitehouse went on to note in the statement that the accelerated decline of Britain’s oil and gas production is being driven by policy, not geology.

“With a supportive environment we could produce half of the oil and gas we need right here at home as we scale up renewables and add over GBP 130 billion ($175.2 billion) to the economy,” he said.

“The outcome of the government’s consultation on the future of the North Sea is a once in a generation opportunity to safeguard energy security and jobs and reach net zero,” he added.

“The Budget on November 26 is a critical opportunity to reform policies, back British jobs, protect industrial Britain and bring investment back to our shores. We must get this right,” Whitehouse went on to state.

Rigzone has contacted the UK Department for Energy Security and Net Zero (DESNZ) and HM Treasury (HMT) for comment on OEUK’s statement. At the time of writing, neither have responded to Rigzone with a comment. 

The budget, or financial statement, is a statement made to the House of Commons by the Chancellor of the Exchequer on the nation’s finances and the government’s proposals for changes to taxation, the UK parliament website states, highlighting that the government has announced that the next budget will take place on Wednesday, November 26.

To contact the author, email andreas.exarheas@rigzone.com