It also wants the government to work closely with the industry to inform future decision-making and policies to give suppliers more certainty over future opportunities, allowing them to invest in technology development, skills and innovation.
The association’s supply chain report covers hundreds of companies providing products and services to support North Sea oil and gas installations and the UK’s energy security.
Katy Heidenreich, OEUK’s Supply Chain and People Director, said, “In 2022 these companies helped the UK oil and gas industry contribute £28 billion [$34.5 billion] to the economy. Over the next decade, this sector plans to spend over £200 billion [$246.3 billion], providing jobs for over 200,000 people, as it expands low-carbon energy production…
“Through engaging with our members and feedback from two surveys, we know they face major headwinds. Our sentiment survey revealed there’s a lack of confidence across the sector. Around a fifth of supply chain companies surveyed said poor visibility of the future UK projects is affecting their ability to plan and service activity both in the near and longer term, a problem that OEUK is working with industry to address.”
According to the report, many companies are evolving to support offshore wind, carbon capture and storage, and hydrogen production. In 2021 the UK government recognized the supply chain’s critical role in its North Sea Transition Deal with the industry. This targets an accelerated the shift to a low-carbon energy mix, lower greenhouse-gas emissions and development of a UK-based low-carbon supply chain with globally exportable expertise.
Heidenreich said, “We are seeing businesses battling to control inflation, and at a national level, we know Brexit has had an impact, making it harder to import and export goods and take advantage of business opportunities within EU countries.
“Most recently, companies of all sizes in our sector have been hit by the uncertainty created by the increase of the Energy Profits Levy when we were already the most highly taxed industry in the UK…
“We are stepping up our work with government to make sure the UK is competitive as a destination for manufacturing and investment and sharpening efforts to help ensure our supply chain captures at least half of the project activity ahead.”