Beleaguered oil firms 'at risk'
June 30, 2009
Thousands of jobs could be lost if the government does not do more to support oil and gas companies, the Commons energy select committee has warned.
Committee chairman Paddy Tipping said they were facing a "quadruple whammy" of high costs, low prices, lack of affordable credit and global recession.
The Labour MP warned the lack of affordable lending and bleak investment prospects could wipe out 50,000 jobs.
Oil and gas production has been falling by 5% every year since a peak in 1999.
Range of supplies
Launching the committee's report, Mr Tipping said: "We all know that in the face of climate change we need to develop a range of sustainable alternative energy supplies for the future.
"However, on the way to that goal we must take steps to ensure we can make the most of our own oil and gas reserves."
He warned that if the government did not respond by giving better "fiscal and regulatory signals then we may never recover anything like as much of our domestic reserve as would be desirable".
He called on ministers to engage with the banks to ensure the sector could borrow what it needed to maintain capital expenditure, jobs, and production during the recession.
The report concluded that new measures announced in this year's Budget would not be enough to enable the sector to deliver the extra two billion barrels of oil hoped for by the Chancellor.
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