Saturday 26 April 2008

GOVERNMENT INTERVENTION NOW NEEDED TO KEEP FORTIES PIPELINE OPEN

With only hours to go before the Forties Pipeline System begins to shut down, it is now time for the Government to intervene actively with Unite and Ineos to ensure that essential services to the Kinneil processing plant are maintained, says the offshore oil and gas industry representative body, Oil & Gas UK. Continuity in the provision of these services is necessary to avoid further disruption to oil and gas production in the central North Sea.

Oil & Gas UK's chief executive, Malcolm Webb, said: "Oil & Gas UK appeals to the Government to intervene urgently with Unite and Ineos to stop the industrial action at Grangemouth from spilling over and hitting offshore production.  This is now affecting some 80 companies and their operations which are in no way connected to or involved in this dispute.  The power, water and steam which the refinery provides to keep the Kinneil site in operation and the 70 offshore oil and gas fields in production can still be supplied without in any way influencing the matters in dispute between Ineos and Unite.

"As Secretary of State John Hutton said earlier this week, there is no justification for the dispute affecting North Sea production.  Oil & Gas UK agrees that this must not be allowed to happen.  The provision of the essential utilities to Kinneil can and should be dealt with outside the industrial action now gripping the refinery at Grangemouth.

"The impact of this dispute goes way beyond Ineos and Unite's immediate differences and is wholly disproportionate", said Malcolm Webb.   "Preparations are now being made to shut the Forties Pipeline System but it is still not too late to save the situation which threatens a substantial proportion of our North Sea oil and gas production.  It is now time for the UK Government at the highest level to step in and take all the necessary actions to ensure that the country is not held to ransom in this manner."

ENDS

NOTE TO EDITORS

• Each day that the Forties Pipeline System is down will cost the UK economy £50 million in lost production including £25 million in lost revenues to the Treasury. 
• The operation of the Forties Pipeline System and the related processing facilities at Kinneil relies on the availability of power, water and steam provided by the Ineos Grangemouth Refinery.  Without these essential services, the Kinneil plant cannot operate and the pipeline, which transports 700,000 barrels of North Sea production each day, has been shut down.   In addition, because many of the 70 affected oil fields also produce gas, up to 30 percent of current gas demand, which is transported through other North Sea pipelines, will also be hit. 
• Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry.  Its members are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry's supply chain.  It has 67 members.

For further information, please contact: Sally Fraser Oil & Gas UK Media Relations                2nd Floor                                                           232-242 Vauxhall Bridge Road    London SW1V 1AU                    Tel:       020 7802 2404 Fax:      020 7802 2401 Mobile:  07976 850996 Email:   sfraser@oilandgasuk.co.uk Pager :  07659 183 999

http://www.oilandgasuk.co.uk