Gas blow-out could have 'huge impact' on North Sea oil industry

A gas blow-out in the North Sea could have a huge impact on the oil industry in the region, according to economic experts.

If a blow-out was to occur, it could result in the EU pushing for more stringent legislation and health and safety laws that could be costly for oil companies operating in the region. Additionally, the government could ask for billions of euros up front as a security measure against potential disasters.

Credit ratings agency Fitch issued the warnings, which were prompted by concerns over Total's Elgin platform in the North Sea. The oil company released a statement saying that environmental damage from the weak is limited, but Greenpeace has also sent a boat to test water samples, with results being released imminently.

Fitch Ratings has estimated that some European Commission measures could force oil firms to set aside up to £8.25 billion to obtain operating licenses to explore and produce oil and gas in EU waters.

Chief executive of Oil & Gas UK Malcolm Webb said: “Moving overall responsibility for offshore safety to the EU, who have absolutely no experience or competence in the regulation of safety in the offshore oil and gas industry is, in our view, totally lacking in sense or balance.”

Posted by Joseph Hutton