The energy industry is going through a worldwide crisis because of an oil glut caused by over-production and lower than anticipated demand. Photograph: Rex Features
Thousands of jobs are at risk after one of Britain’s leading offshore oil platform builders failed to make the shortlist for one of the last major contracts up for grabs in the North Sea.
The decision by the US oil group Chevron to exclude the Tyneside-based OGN from its list of prequalifying contractors has rekindled a simmering row between the government and Labour MPs representing the north-east.
Foreign companies appear to be in pole position to win the contract for the Captain field despite OGN’s long record of success. The setback comes at a time when work is drying up because of plunging oil prices. Even with a jump to around $50 a barrel on Friday, the price is still more than 50% down on last summer.
“If we lose this contract I am petrified that it could lead to closure and that is the end. Once a business closes then it is rare for it to reopen, ” said Mary Glindon, MP for North Tyneside.
Related: North Sea oil and gas industry suffers worst losses in decades
“Skilled workers can maybe find employment in Africa or elsewhere, as we saw with the closure of shipyards, but it is often overlooked that this is bad for families and the social fabric of the north-east when men are forced to work away from home, ” she said.
Glindon and other local MPs have repeatedly complained to Amber Rudd, the energy and climate change secretary, and other ministers that British suppliers are not being sufficiently supported. They are planning further appeals to government.
The regulator did not comment specifically on the Chevron shortlist, but a spokesman said: “When considering proposed field development plans we expect operators and licensees to adopt contracting strategies that deliver the best overall value.”
The energy industry is going through a worldwide crisis because of an oil glut caused by over-production and lower than anticipated demand. Shell, BP and others have axed hundreds of jobs in Aberdeen. Denmark’s Maersk Oil became the latest operator to announce cuts last week, putting 200 jobs at risk when it said it would seek permission to shut down its Janice platform in the North Sea early next year.