Oil and gas sector call on UK government for help as COVID-19 worsens crash in their profits
London. An overall downward trend in the price of oil and gas has been exacerbated by COVID-19 and the failure of OPEC to agree to production restraints according the latest report from the oil and gas industry.
The UK oil and gas industry is calling for major financial assistance and governmental intervention to save it from crashing prices amid a "perfect storm" of factors which include knock-on effects from the Coronavirus illness 2019 (COVID-2019).
OGUK, which represents oil and gas businesses, published its annual report on 19 March 2020 which says that a collapse in commodity prices, increased oil production by Saudi Arabia and Russia and the COVID-19 pandemic are among key developments driving the price of oil and gas, and therefore their profits, to levels not seen since the crash of 2008.
"We now face a situation where E&P production revenues could be almost half the level of just two years ago, despite the same level of output", writes Deirdre Michie, Chief Executive OGUK, in the introduction to her groups report BUSINESS OUTLOOK 2020: Markets & Investment.
"This trend is unsustainable for many and without intervention could lead to the loss of businesses, jobs and skills anchored in the UK", Michie argues.
This will be one of a myriad of examples of industry seeking governmental intervention, with public funds, to prop themselves up amid declining productivity and profits, told SPUTNIK.
The oil and gas sector have been one of the most subsidised industries on the planet with billions in public money poured in over the decades, along with tax breaks and other forms of protectionism. Critics argue that constantly subsidising these industries which are incredibly polluting and help drive global warming, undermines the shift away from fossil fuels and towards renewable energy which is needed to combat growing climate change. But the report says that a well-funded industry is needed in order to assist the UK to transition into a carbon neutral economy. The transition to "net zero" will "only be achieved through a joined-up approach across government, regulators and industry", the report says.