Oil industry fears EU interference

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The Independent Online

The North Sea oil industry has warned Tony Blair of the damage the sector faces from the new European constitution.

The industry this week wrote to the Prime Minister, calling for immediate action to stop new powers proposed in the draft EU Constitution.

The Oil & Gas Industry Liason Team (ILT) said interference from Europe would slow the industry's ability to make decisions at a delicate mature phase in the life of the UK Continental Shelf.

A little-noticed part of the proposed EU Constitution, called the Energy Chapter, proposes that energy policy be settled on an EU-wide level.

The co-chairs of the ILT, Sir Ian Wood, chairman of the John Wood Group, and Paul Blakeley, vice president of Talisman Energy, wrote: "Our basic concern is that the proposed Energy Chapter will subject our industry to new uncertainties and risks ... which will definitely damage our ability to attract investment."

European foreign ministers will meet on Monday to discuss non-institutional issues and the UK offshore industry wants the Government to press for the Energy Chapter's removal.

The industry fears ministers will not "focus" on topics such as energy policy, when the proposed constitution covers bigger and more contentious subjects.

The ILT letter said: "We believe EU jurisdiction is effective only where there is a rationale for shared competence and where active support and consensus exists among member states and stakeholders.

"We cannot see how this applies in the case of energy. The UK has by far the largest oil and gas resources in the EU and is in a unique position in the Union."

The Energy Chapter seeks to establish powers over the functioning of the energy market, security of supply and efficiency measures.

The British industry fears its interests will get sucked into "a wider political debate" leading to less oil and gas eventually being recovered from the UK Continental Shelf.