Brexit: British oil and gas sector calls for unity amid uncertainty

Published June 26th, 2016 - 05:36 GMT
BP in January said it would trim around 600 from its payroll to ensure it remains competitive in the North Sea environment. (Shutterstock)
BP in January said it would trim around 600 from its payroll to ensure it remains competitive in the North Sea environment. (Shutterstock)

An industry group in the British oil and gas sector called for unity Friday in order to minimize the impacts of the vote to leave the European Union.

"I will do everything I can as Prime Minister to steady the ship over the coming weeks and months, but I do not think it would be right for me to try to be the captain that steers our country to its next destination," Prime Minister David Cameron, who has resigned, said in a statement.

Cameron moved in favor of the so-called remain camp, arguing that staying in the EU would be the better choice for the British economy. His push came as those in the oil and gas sector warned the impact from the low price of oil on the British economy could not be underestimated. A mid-June report from industry group Oil & Gas U.K. said jobs losses since the market downturn in 2014 reached around 120,000. Another 40,000 are expected before the end of the year.

The group in a statement Friday said it respected the democratic decision to leave the EU, saying it was staying apolitical as it charted a strategy for the transition.

"We hope that all those involved will now come together and work constructively to make this transition as smooth as possible and we ask that the U.K. government clearly outlines the process which will follow to minimize any potential period of uncertainty," the group said in a statement.

Oil & Gas U.K. said it would consult closely with its members on how best to navigate the departure. British energy company BP, for its part, said it respected the decision made by the majority of British voters, adding it would remain an integral part of the British economy.

"It is far too early to understand the detailed implications of this decision and uncertainty is never helpful for a business such as ours," the company said in an emailed statement. "However, we do not currently expect it to have a significant impact on BP's business or investments in the U.K. and continental Europe, nor on the location of our headquarter or our staff."

BP in January said it would trim around 600 from its payroll to ensure it remains competitive in the North Sea environment.

For the broader economy, Mark Carney, the governor of the Bank of England, said there will be an inevitable period of uncertainty following the referendum.

"It will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world," he said. "Some market and economic volatility can be expected as this process unfolds."

A statement, meanwhile, from members of the Group of Seven major world economies expressed a sentiment of unity, but advised there could be "excessive volatility" in markets during the mid-term.

The FTSE 100 was down 3.8 percent, or 241 points, one half hour before markets opened in New York.

By Daniel J. Graeber

 

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