Industry

Small shale gas companies fear they will be squeezed out of the UK

A UK fracking industry could be dominated by overseas companies that fly in staff and equipment and take their profits home, a new business group has warned.

The Onshore Energy Services Group, launched yesterday, said this would be a disaster for small UK companies, local jobs and the economy.

The group, formed by ten businessmen with strong links to the onshore drilling industry, called on the government to support UK small and medium-sized businesses (SMEs) in the onshore oil and gas supply chain.

In a policy paper published to accompany the launch, OESG said:

“If British SMEs aren’t able to secure a fair share of the supply chain jobs on offer, there’s a real risk the industry will come to be dominated by overseas companies that fly their people and equipment in, and their profits home.”

This would “prevent Britain from maximising the benefits of onshore oil and gas,” the group said.

The group said UK SMEs needed to feel confident that there would be enough onshore shale gas development to make investment worthwhile.

One of the founders, Jonti Hobday, of the drilling company, PR Marriott, said:

“There’s so much uncertainty for us in the UK right now that we’re afraid to invest here.  We’ve got no choice but to find work in places like Africa just to keep our lads busy, when what we’d really like to be doing is taking on more young people and growing our business in Britain.”

OESG also called for

  • Tax breaks for exploration companies spending money with British supply chain SMEs
  • Government-backed loan guarantee scheme to help supply chain companies finance new equipment
  • Help for companies recruiting and training staff

The chief executive of OESG, Lee Potts, said: “We want to ensure that British SMEs play a leading role in Britain’s next industrial revolution.”

The founding members of OESG all run small or medium sized business, most of which are based in the north of England. They have already worked with operators including Cuadrilla, Rathlin Energy, IGas, Angus Energy and Europa Oil and Gas. Two of the group run a joint enterprise managing drilling operations across the UK.

Mr Potts is the founder of the waste company, Remsol. The other directors are: Glynn Williams, of Clear Solutions, which supplies drilling fluids; Jonathan Foster, of the planning service company Petroleum Safety Services; and Simon Talbot, of Ground-Gas Solutions, which monitored methane emissions for Cuadrilla and IGas.

The group says it will lobby local and central government on the needs and benefits of a British SME supply chain.

Profiles of founder members

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