LIKE every other business sector in current times, the oil and gas industry is facing continuing problems with the Covid-19 pandemic and low prices for their products.
Now the industry body Oil and Gas UK (OGUK) has launched a survey to determine the extent of the difficulties, which will form part of a resilience package to be put to governments in the coming weeks.
Its comprehensive set of questions covers levels of offshore activity, the financial position of companies, employment levels and plans, investment and feedback on steps that industry and Government can take to support the sector.
The survey has been issued to hundreds of OGUK member companies in the industry supply chain, ranging from large contractors to small and medium-sized enterprises.
Their answers will inform the details of a Covid-19 Sectoral Resilience Package being put together by industry, which will build upon the already extensive support offered by governments to companies and self-employed workers.
This is intended to directly address sector-specific issues, and includes what has come to be known as the stranded middle; companies who currently would not be eligible to apply for the Coronavirus Business Interruption Loan (CBIL) scheme or the Covid-19 Corporate Financing Facility (CCFF).
Energy Minister Kwasi Kwarteng has already heard from OGUK’s contractor council about the challenges facing the sector.
The UK Government, following pressure from OGUK, is to introduce a Coronavirus Large Business Interruption Loan Scheme (CLBILS) to provide a Government guarantee of 80% that will enable banks to make loans of up to £25 million to firms with an annual turnover of between £45m and £500m.
OGUK has said it hopes to give further details on its proposals in the coming weeks.
Its supply chain director, Matt Abraham, said: “Our supply chain is facing pressures in the extreme. The operational impact of the coronavirus pandemic, low oil and gas demand and low prices mean an uncertain future for many. This triple whammy of concern comes only as many were just starting to emerge from the impact of the previous prolonged downturn.”
Abraham welcomed the Government’s large business loan scheme, but said there were still specific issues regarding support for the oil and gas sector, which OGUK was working to address with the Scottish and UK governments.
“We’re hoping this survey will give us a clear idea of where governments and regulators can offer specific help that will really make a difference, and we’re urging all of our members in the supply chain to take part,” he said.
“In the coming days and weeks, we’ll put forward to Government our proposals for a Covid-19 Sectoral Resilience Package and look forward to continuing what has been a positive and constructive dialogue.
“We’re grateful to the CBI particularly for their support in developing our proposals – remaining joined up across industries is critical as we look to protect jobs and businesses.”
OKUG has also formed a logistics group to consider how to sustain normal operations as the virus spreads.
Abraham added that a major concern was challenges by the police over long-distance journeys given travel restrictions.
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