Eggar calls for oil co-operation

THE GOVERNMENT is calling for a new era of co-operation between Whitehall, the North Sea oil companies and their equipment suppliers in order to secure the future of the British offshore industry.

Tim Eggar, the Energy Minister, warned yesterday that the entire future of UK oil and gas production will be jeopardised unless the expense and delay of developing new fields can be reduced.

Speaking at the launch of a Department of Trade and Industry report on the UK continental shelf, Mr Eggar suggested that unnecessary expense and delay had in the past been caused by confrontation between various parties.

The DTI report, compiled by a working party, proposes a series of cost-cutting measures including the introduction of standard equipment specifications and contracts, and streamlining in the way joint ventures between producers are formed.

The report also urges the Government to reduce the bureaucratic and cost burden on operators, particularly in the development of smaller fields.

Mr Eggar said that the DTI would do its utmost to implement the recommendations. 'What we are asking for is a very considerable culture change in the oil industry and in government. You cannot legislate for cultural change,' he said.

The Scottish Office estimates that about 300,000 jobs depend directly on the UK offshore industry. Total investment amounts to about pounds 10bn a year. Concern that this investment would move elsewhere has mounted over the past few years, when costs escalated at up to 20 per cent a year. Some companies, such as Conoco, believe that costs need to be cut by at least 30 per cent from 1991 levels.