Scottish Energy Minister Paul Wheelhouse said today that Brexit will “negatively impact” on the ability of the North Sea’s oil and gas sector to fulfil the vision set out for the North Sea by its industry regulator.
The MSP was responding to a question from Aberdeenshire East MSP Gillian Martin (SNP) after analysis – first reported in Scottish Energy News last month ** – from the Robert Gordon University Oil and Gas Institute revealed the potential impact of exiting the European Union.
The assessment last month had warned Brexit could cost the oil and gas supply chain £200 million extra per year in tariffs and export taxes.
In response to the written question by Martin, the Wheelhouse said: “The findings from the Robert Gordon University Oil and Gas Institute on the impact of Brexit highlight the significant value of Scotland being a member of the European Single Market and the potential damage to Scotland’s economy from exiting the European Union.
“The report highlights that the oil and gas supply chain, which has seen revenues fall by around 30% during the industry downturn, could face up to £200 million in additional costs per year to access international markets as a result of Brexit.
“This will negatively impact upon the industry’s efforts to fulfil the Oil and Gas Authority’s vision to double the share of the global supply chain market taken by Scottish and the rest of the UK supply chain enterprises.
“The report also makes clear the challenges posed to the sector by restricting the movement of people as the oil and gas industry relies heavily on access to international skills and capabilities.”
Since 2014, more than 120,000 people across the UK have lost their jobs in the sector as a result of the downturn.
In 2014, the Oil and Gas Authority (OGA) was set up to be part of a tripartite approach encompassing the regulator, industry and government.
MSP Martin commented: “The Scottish Government has already highlighted the potential cost of leaving the European Union and has implied that by 2030 the economy could be up to £11.2 billion lower compared to current forecasted GDP in the absence of Brexit.
“Paul Wheelhouse has reinforced the concerns of the institute which shows the very real ramifications for the North Sea oil and gas sector from Brexit.
“We need access to the single market and free movement of people for access to skills and talent. At a time when the sector is beginning to pick up it makes no sense as to why the UK Government would try and limit that further.”