BLOG: Brexit Likely to Have Direct Impact on UK Oil, Gas Industry

BLOG: Brexit Likely to Have Direct Impact on UK Oil, Gas Industry
Brexit is likely to affect the UK oil and gas sector, says professor at Robert Gordon University.

Brexit is likely to have a direct impact on the UK oil and gas industry, according to Paul de Leeuw, director of Robert Gordon University’s Oil and Gas Institute.

The UK’s decision to leave the European Union could see the supply chain become exposed to additional tariffs, in the absence of any clear and/or new trade agreements, de Leeuw warned.

Andreas Exarheas
Andreas Exarheas, Associate Editor, Rigzone
Associate Editor, Rigzone

The university professor highlighted that if the UK is not able to negotiate new trade agreements within the prescribed two year window, or is not able to extend the timeframe, a likely fall-back option will be for the UK to apply the rules set out by the World Trade Organization (WTO).

“Comparing the relevant sections of the current EU and WTO trade agreements, RGU’s Oil and Gas Institute estimates that moving to the WTO framework could result in up to $243 million (GBP 200 million) extra cost per year for the UK’s oil and gas supply chain,” de Leeuw said.

Another aspect of Brexit which could affect the UK oil and gas industry is the freedom of the movement of people. Prime Minister Theresa May has previously claimed that she will secure full control over the UK borders, and therefore immigration.

“This will have a direct impact on the movement of people. With the oil and gas industry relying heavily on access to international skills and capabilities, this may be one of the more challenging areas to be addressed,” de Leeuw said.

It’s difficult to know exactly how much Brexit will affect the UK oil and gas industry until the country’s leaders start hashing out a deal with their EU counterparts. Regardless of what happens in these negotiations however, de Leeuw is optimistic about the oil and gas sector’s future.

“The oil and gas industry has gone through a number of very tough cycles recently and has successfully managed to weather the storms,” he said.

“Brexit will inevitably bring new challenges, but we can be confident that the industry’s determination and resilience will ultimately overcome whatever comes its way,” he added.

I would be inclined to agree. If the industry can handle such a radical price tumble since the highs of 2014, then Brexit is extremely unlikely to derail the sector by a considerable amount.


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Robert Diggory | Apr. 3, 2017
I agree with Calvin the free movement of workers world wide is far more important than the Brexit difficulties. On the question of Scottish independence he illustrates perfectly the reason to stay in the UK as no oil companies are owned by Scotland. They are all international and we in England are subsidizing them up to the armpits.

Robert Diggory | Apr. 3, 2017
This is all conjecture. No one in either industry or academia has the insight as to what will happen in the future. I wish people like the professor would just shut up and be more positive about the future of the UK O&G industry and not be so gloom and doom about Brexit.

Calvin Graham | Mar. 31, 2017
Id have thought if anything, once immigration is controlled by Westminster and we have free trade/labour deals with Canada/US, it will be *far* easier for oil & gas workers to move back and forward across the pond, after all the largest petrochemical companies are not even from the EU and its punitively difficult getting work visas for US or Canadian workers. Plus all the other issues affecting the industry which should be decided solely by Westminster and not by bureaucrats from elsewhere: environmental regulations, how many hours people can work, who can be awarded government contracts, accounting procedures etc If anything, Scotlands independence being up for grabs is probably hugely more important right now, although it likely wont happen.


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