The leading representative body for the UK offshore oil and gas industry has launched a survey in a bid to help find solutions to the problems faced by the supply chain as it deals with the impact of the coronavirus pandemic and low oil and gas prices.
A comprehensive set of questions covering offshore activity levels, the financial position of companies, employment levels and plans, investment and feedback on steps that can be taken by industry and government to support the sector was issued to the hundreds of OGUK member companies in the industry’s supply chain who range from larger contractors to small and medium sized enterprises.
The results of the survey will inform the details of a COVID 19 Sectoral Resilience Package being put together by industry to propose to governments in the coming weeks. It will build upon the already extensive support offered by governments to companies and self-employed workers and is intended to directly address sector-specific issues. This 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).
On Wednesday, BEIS Energy Minister Kwasi Kwarteng joined OGUK’s contractor council to hear first-hand the challenges facing the sector.
Last night in line with requests from OGUK, the UK government announced it has introduced a Coronavirus Large Business Interruption Loan Scheme (CLBILS) which will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million.
OGUK today said it hopes to announce further details on its proposals in the coming weeks.
Commenting, OGUK 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. Last night’s announcement from government is welcome and confirms it is listening and responding to feedback, however there are still specific issues with regards to support for the oil and gas sector which OGUK is working to address with both UK and Scottish 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. In the coming days and weeks, we’ll put forward to government our proposals for a COVID19 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.”
Information for the industry about COVID-19 is available at www.oilandgasuk.co.uk/covid-19