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Squeezing workers does not aid North Sea oil sector, says OGUK panellist

1 September 2020

The UK offshore oil and gas industry was warned to avoid a race to the bottom on seafarer’s wages as it seeks to recover from the ongoing downturn in the sector, which has deteriorated during the coronavirus crisis.

Speaking at an Oil & Gas UK webinar, The Road to Recovery –  UK Oil and Gas Industry Action, Martin White, Vice President at Halliburton, said that asking for discounts from the supply chain and service sector – which would put further pressure on seafarers – is not the right solution.

'That doesn’t really work, it's never worked, and there's nothing left to squeeze from the service sector,' he said. 'It kills innovation and we spend time arguing over money.'

Instead he recommends increased collaboration as a way of increasing competitiveness.

The webinar panel, which consisted of speakers from OGUK, Wood, the Oil and Gas Authority (OGA) and Spirit Energy, was united on the need to preserve the North Sea energy sector, noting that it provides more than 250,000 jobs, is vital for both North East Scotland and the UK economies, and can play a key role in the transition to a zero carbon economy, for example through carbon capture and storage. Yet recovery is dependent on getting enough of the workforce back offshore.

Neil McCulloch, executive VP, Technical & Operated Assets at Spirit Energy, said that his company is increasing offshore crewing levels. Yet progress on the company's objectives in 2021 will depend on whether further increases are practical given the threat still posed by Covid-19.

The panellists also highlighted the need to develop a workforce with the right skills to enable post-crisis growth, especially given the increasing momentum towards zero carbon.

'Our industry needs to continue to attract the best and brightest talent to Aberdeen. We need a workforce that can take us through the energy transition,' said White.


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