A hard Brexit could cost the oil and gas industry £500 million per year, Oil and Gas UK warned on Thursday.
In the worst case scenario, the costs for trading £73 billion worth of oil and gas annually would jump from £600 million a year now to £1.1 billion. In the best case scenario, should the UK strike deals with non-EU countries, the cost of trade may fall to £500 million.
The warning comes from the UK’s offshore oil and gas industry association, Oil and Gas UK, who wrote to the prime minister this week to warn on the negative effects of a hard Brexit.
The body’s chief executive, Deirdre Michie, said:
“We are becoming a more globally competitive industry, but we continue to be very sensitive to any additional burdens either in relation to cost, or restrictions on the movement of key personnel required for critical operations.”
The industry is only just recovering from a plunge in oil prices that saw several major firms sell off assets to stay afloat. A hard Brexit impacting on the industry’s recovery is something firms can ill-afford.
Oil and Gas UK said that “this additional cost would be unwelcome”, urging the government to ensure that Brexit negotiations do not put the industry at a competitive disadvantage.