INDUSTRY body Oil and Gas UK has written to Prime Minister Theresa May urging her to minimise any “Brexit burden” after new research revealed that the cost of oil trading following the UK’s exit from Europe could double to £1.1 billion.

A study commissioned by the body considered the possible cost of trade for the industry and illustrates where the UK sector’s workforce comes from.

Oil and Gas UK said around £73bn of oil and gas-related trade (both fuel and non-fuel) flowed between the UK and the rest of world — around £61bn of which related to traded goods, which could be subject to tariffs. Services account for the remaining £12bn of the total.

It said that under the “status quo” scenario with the UK still a member of the EU, the total cost of this trade was around £600 million a year – less than two per cent of the total value of trade that is subject to tariffs.

In a worst-case scenario post-Brexit – where the UK reverts to World Trade Organisation (WTO) rules with the EU and the rest of the world – the research showed the likely cost would double. However, it added that if the UK was able to negotiate minimal tariffs with the EU and improved tariffs with the rest of the world, the cost of trade could fall by around £100m a year to £500m.

The study also showed that of those people directly employed by the oil and gas industry, the vast majority (90 per cent) are UK nationals, five per cent are EU workers from countries other than the UK and a similar percentage are non-EU.

Around 70 per cent of the EU workers within the industry are skilled, with half of them holding managerial roles.

Oil and Gas UK said it understands that these skilled roles which are filled by EU workers are often critical for various projects, and it is asking the Government to consider these jobs when developing a domestic immigration policy.

It is recommending three priorities for the Government during Brexit negotiations — frictionless access to markets and labour, maintaining a strong voice in Europe and protecting energy trading and the internal energy market.

Chief executive, Deirdre Michie, said: “Oil and Gas UK is an apolitical organisation representing a large and diverse membership where there will be a variety of views. “While the trade body can’t take a position on Brexit, we commissioned the research because we need to understand the possible impact on our industry — and the possible opportunities — from exiting the EU.

“We also identified other EU policy issues as critical to the oil and gas industry and will require negotiation with European counterparts, as well as discussions at the domestic level between government, regulators and industry during the Brexit process. “During the global industry downturn, our industry has continued to focus on increasing its production efficiency, and on its unit operating costs which have improved by almost 50 per cent.

“We are becoming a more globally competitive industry, but we continue to be very sensitive to any additional burdens either in relation to cost, or restrictions on the movement of key personnel required for critical operations.”

She said it was estimated that there were still up to 20 billion barrels of oil and gas to recover from the UK Continental Shelf (UKCS) and, if properly supported, our “world-class supply chain” could double its turnover by 2035.

Michie added: “Oil & Gas UK would welcome discussions with government officials to outline industry’s concerns and opportunities and help identify a path forward during Brexit negotiations.

“Our request of government is that any change, whether domestic or European, is managed in a manner that minimises risk to the oil and gas industry and provides predictability and clarity wherever possible, through constructive dialogue and consultation.”