Examination of Witnesses (Question Numbers
180-199)
MR MIKE
O'BRIEN MP, MR
SIMON TOOLE
AND MR
JIM CAMPBELL
25 MARCH 2009
Q180 Charles Hendry: Can I take you
back to the issue of targets. Mr Toole said that for some of the
targets it is not clear who is responsible for delivering them.
Would you agree that in general a target really only has merit
if it has a clear line of responsibility, that there is a method
of measuring progress towards that target and, indeed, there is
a road map for how that should be reached?
Mr O'Brien: No, I would not agree
fully with that. I think if you have targets, they ought to be
realistic and they ought to be deliverable, and you have got to
know how you are going to deliver them, but what we were talking
about here in terms of the oil and gas industry is something slightly
different. It is not like an NHS target or an education target,
or something like that, where the Government has clear responsibilities,
has levers of power, has the ability to intervene and do something
about that and is responsible for the funding going in. What we
are dealing with here is an industry that says: "Look, Government,
we want to work with you, we want to identify what you would like
to see us do over the course of the next decade and we would like
to agree with you how we would go about achieving that, and in
doing that we will agree some targets with you", which was
done back in 1999, "but they are not going to be enforceable.
You are not going to be able to deliver them, Government, we have
got to deliver them." Some of those companies will say, "We
agree that we will do something", but then those companies
may be only there for five years rather than 14 years and then
have withdrawn from the UK Continental Shelf and are working elsewhere;
other companies have come in that were not a part of that process.
So I think targets have some merit if they are agreed; sometimes
they may not be as enforceable and deliverable by government as
we might perhaps like or perhaps would have the ability to deliver
in other sectors. I think they have got some benefit, as long
as we recognise that these are no more than indications to the
industry as to what we would like to achieve. I had a discussion,
for example, with some people in the industry recently about gas
storage, and they said, "Do you want to give us an indication
as to what you would like?" It became quite difficult, because,
as I pointed out, "This is a Labour minister talking to some
people in the private sector and you are asking for more government
intervention, are you?", and they said, "What we would
like to know is really what you want, because we can then go back
to our board and decide what part of that we can deliver",
which is perfectly reasonable. So, in terms of indicative targets,
I think they have got some merit, but I do not think we need to
have all the levers you describe in order to give them that level
of merit. We must not put more weight on them in terms of deliverability
than they can stand.
Q181 Charles Hendry: Can I broaden
that out slightly into the way in which the Government tries to
encourage the North Sea development? In the nuclear sector you
have established, obviously, nuclear development. A very proactive
body looks at where the protected barriers are, looks at how they
can remove those barriers. You have also got the New Build Forum.
PILOT, perhaps, is relatively similar to the forum because it
brings the key figures together, but there is not a similar body
to look at where the obstacles to development are and how you
can be more proactive in making that happen, so there is no similar
equivalent to the Office of Nuclear Development for the oil and
gas industry. Do you think there should be? Do you think our Government
should have that greater degree of engagement there?
Mr O'Brien: The Government has
a very substantial degree of engagement. I do not think we need
to create a particular office in order to achieve that. The industry
has had, and continues to have, a close and good relationship
with government. Indeed, I sometimes think that I wish that some
other sectors were so straightforward to deal with, because these
are people who are investing long-term, they talk to us regularly
and many of them are still involved in UKCS, are big companies
who are used to dealing with government and, therefore, in terms
of the way in which they deal with government, they are used to
dealing with a group of officials that they know. Both Jim and
Simon are well-known to the oil and gas industry and so are some
of our other officials. I have not come across them suggesting
that they necessarily want a new office. If they did, we would
be very happy to talk to them on PILOT and see whether there is
a way of developing some further institutional relationships with
them that help further exploit UKCS. So we are not opposed to
the whole idea; I think if they come to us and talk to us about
that, we will engage with them, effectively.
Chairman: Can we perhaps explore the
potential for maximising new opportunities and, indeed, maximising
recovery of what is already available. Mike.
Q182 Mr Weir: You mentioned smaller
companies in the North Sea, and in the course of our evidence
we have heard from the Independents' Association and others. To
what extent do you think the effect of extraction of remaining
reserves will be dependent on smaller companies operating in the
sector?
Mr O'Brien: We have had a lot
of interest in the recent round of licences. Much of that interest
has come from smaller companies. I say smaller companies: these
are oil companies, so they are a reasonable size anyway.
Q183 Mr Weir: It is a relative term.
Mr O'Brien: It is a relative term.
We are not talking about SMEs here. They are not the big Chevron
Texaco's, and so on, although they are all still engaged in various
different forms in the UK in exploitation, but it is the case
that we have recently seen a lot of interest from the smaller
explorers, who say that they want to see if they can identify
resources, and some of those will look to go and drill and discover
resources, and then, if they find them, they will sell them and
somebody else will exploit them. Others will to look to exploit
over a longer term. So, yes, it is the case that we will increasingly
see these smaller companies become much more important in developing
the UK Continental Shelf, and that is why, in terms of engagement
with them, it is important that we have officials who can work
with them and talk to them, but we still have the big players
who play a substantial role in PILOT, and we can see, in terms
of the way in which the oil and gas industry is developing, that
because there is a strong institutional structure there, the small
companies do see it and do get engaged with it, so we can work
with them quite successfully.
Q184 Mr Weir: One of the issues that
seems to be coming through in the evidence we have heard is the
question of the use of existing infrastructure which is basically
owned by the larger companies and also the future infrastructure
that may be needed, particular west of Shetland. One of the things
the smaller companies say is the voluntary infrastructure, the
Code of Practice, is not working and they are finding it difficult
to access infrastructure. What is your view on that and what is
the Government doing to ensure that access to infrastructure is
fair?
Mr O'Brien: You are right that
there have been concerns expressed by some of the smaller companies
that the large companies have the oil pipeline and gas infrastructure,
they have already got it out there. The question is, if the smaller
companies are exploiting an area, can they get access to that
infrastructure and get their oil and gas out? Back in 2001, I
think, we had the guidelines, which were agreed with the industry,
about accessibility, and essentially the processes is that they
are supposed to negotiate. If they do not reach a deal, then they
come to the Secretary of State and the Secretary of State can
then intervene. We have to look at the issues. It takes about
ten weeks to look through the issues, on average, and to identify
what the price of access ought to be. So we have agreed that process.
Some of the smaller companies get frustrated because they feel
that ten weeks is a long time; they want a decision now (I understand
that) and they want a decision that is in their favour (I understand
that). They are also concerned that some of the larger companies
are now putting additional premiums on to the access, premiums
around security and whether there will be sufficient material
going into the infrastructure, whether it will be done in a particular
way, in effect requiring insurance policies from the smaller companies.
They are not only paying for access, which may be on the generally
agreed rate, but now they are being asked for certain premiums,
and they are getting a bit worried about that, so what we are
looking to do is to engage with the larger companies who have
got the infrastructure and say, "Look, we have got some guidelines
going back to 2001. They have actually worked reasonably well,
they have solved the worst problems, but they are not perfect,
they are still raising issues", and, of course, in any dispute,
particularly over price, you will have people with two different
views, and if the price does not turn out to be the view that
one of them wants, they will be dissatisfied and they will come
and complain. I think we have got a situation which works a lot
better than it did before 2001, is not perfect—some problems
have arisen in recent years which we need to engage with the industry
on—but most of the big players want to do this, I think,
in a reasonably straightforward way. They want, of course, to
maximise their profit, because, after all, they have put this
infrastructure in at great cost and they are not going to give
it away to the smaller companies and the smaller companies say,
"Look, we could do far more if we could do it a lot cheaper."
There is always this sort of tension, and there always will be,
we are not going to get away from that, but if we can resolve
some of those issues around the additional premiums, that would
be very helpful.
Q185 Mr Weir: Has the Secretary of
State been asked to intervene in terms of the Code of Practice?
If so, how often, and what is the outcome of that intervention?
Mr Toole: Has there ever been
an actual determination by the Secretary of State? No, there has
not. Have there been cases taken towards that direction that have
then been settled out of court, so to speak? Yes, there have.
Has the guidance that the Secretary of State published as to how
he would determine something if it came to him had an impact?
It has, because it has set out what the parameters for a second
hub would be, and there is no point negotiating in a way too far
away from those parameters if you know that the backstop is not
going to be where you are negotiating. The Minister has recently
set out a letter challenging the industry to be more timely in
the discussions, because that is one of the main problems, that
things just last too long. There is still a barrier that companies
do not really want to get into what is a quasi judicial situation
with the Secretary of State, and that is why, as the Minister
says, we are trying to work with them at the moment to refine
some of the guidance that has been given to make it clearer what
the eventual outcome would be so that, again, the negotiations
can take place in that area rather than at some area that is simply
unreasonable. So the short answer is that there has never been
a determination, but that does not mean that that process and
the guidelines that have been set up are not influencing what
is going on in the day-to-day negotiations.
Q186 Mr Weir: One final point for
the Minister. One of the things that was suggested to us about
independence was the idea of a common carrier system for the infrastructure
to make sure that everybody—
Mr O'Brien: A sort of national
grid type of thing?
Q187 Mr Weir: That is right. I believe
it works in the Gulf of Mexico, so they told us in any event.
That might be difficult with the existing infrastructure, obviously.
West of Shetland, for example, new infrastructure will be required
because nothing exists at the moment. I just wonder if the Government
has given any thought to such a system in our oil and gas fields,
or granting access through legislation or regulation if it is
not prepared to go that far.
Mr O'Brien: We think that the
exploitation of the benefits of this will bring large returns
to companies, and if the state were to intervene and fund such
a common carrier, it is difficult. Although we would get taxation
from it, we think that this is the sort of thing that the private
sector really ought to do. The infrastructure system has worked
reasonably well, not (as we have just discussed) perfectly but
reasonably well, in the North Sea. Moving into west of Shetland,
obviously we have an area which is going to be difficult to exploit,
it is much more difficult than the North Sea, but the state intervening
to tell the companies how we are going to lay the infrastructure
out, making decisions for them about it and then, presumably,
charging them substantial amounts for access to it, seems to me
to be not the way to go. I would suspect it will mean that many
of the companies who would otherwise be looking there will say,
"Look, if we could go there and decide how we want to do
it, we would go, but if you are going to decide, Government, how
to do it, we are not going to go."
Q188 Mr Weir: I do not think the
idea is necessarily that the state would pay for laying the infrastructure
and then charge people for access to it, but to ensure that we
do not get into a situation where one company controls the infrastructure
and controls subsequent access to it; a form of legislation or
regulation that would ensure that whatever way the cost has been
put to the company, once the infrastructure is in place, there
is no barrier to anyone else who is exploring in that area to
get access to bring the oil and gas ashore?
Mr O'Brien: At the moment, west
of Shetland we have got a number of companies interested, Total,
Chevron, BP. They are all looking at various permutations of putting
in infrastructure if they decide to carry out their exploitation
there, and there are issues about whether there should be connections
from Sullom Voe, whether it would then go down to St Fergus or
whether it would go across to the Total pipeline at Frigg. These
are all issues which I think, in the end, are commercial ones
more than ones that you want to determine by regulation. As far
as access to infrastructure is concerned, we have got the guidelines.
Those guidelines have worked reasonably well since 2001, not perfectly,
but reasonably well. Do we now want to go into a situation where
we put in place regulations which oblige larger companies (and
it will be by and large them) to put in infrastructure and then
oblige them to put particular links in for the smaller companies
by law? In which case, they will simply say, "All right,
if you want us to do that, we are going to charge for that and
those charges will have to go somewhere or we will decide not
to carry out that job because it will not be economic any more."
I think you are intruding into areas where I do not think the
Government necessarily needs to go at the moment. I think we need
to monitor it and make sure it is working properly, but I am reluctant
to go there at the moment. I would not say it was impossible if
things went very wrong, that would mean we would get involved,
but we have not got any demand to do it at the moment.
Chairman: Robert, I know you wanted to
raise a few issues particularly west of Shetland.
Q189 Sir Robert Smith: Yes. I first
remind the committee of my interests on the Register of Members'
Interests as a shareholder in Shell and that, as Vice Chair of
the All Party Oil and Gas Group, I visited the ONS and Stavanga
funded by various oil companies for the exhibition and conference.
You have highlighted that for the smaller fields, the hubs are
crucial, the infrastructure, you have talked about access, but
the most crucial thing at this time for the industry is that unless
those hubs remain economic all these small fields will remain
undeveloped for ever.
Mr O'Brien: Yes.
Q190 Sir Robert Smith: West of Shetland,
because you did engage with the industry to try and get some kind
of collective understanding, because there is all this tantalising
availability west of Shetland, various gas fields—no one
of them really stacks up, but if one of them were willing to take
the risk, then the others could tie together?
Mr O'Brien: Total are saying that
they are looking at Laggan and Tormore at the moment and that
they are thinking about putting a gas hub in at Sullom Voe, and
we are looking possibly at a decision on that in the autumn, and
then Chevron are looking at Rosebank and Lochnagar and BP at Clair;
so we have got a lot of interest. There is a difference between
jumping in and regulating and engaging with the industry and saying,
"Look, if you are creating hubs here, we want to engage with
you about what they are going to be like", and it is not
just a planning issue here, it is an infrastructure issue. Are
these going to be adequate? Are they going to provide the opportunity
for others to come in at a later stage? It is more of a dialogue
rather than a diktat, and that is the way we have successfully
operated in the North Sea up to now, and I think with west of
Shetland, in order to exploit it, that is probably the better
way of engaging, unless we have to do it some other way.
Q191 Sir Robert Smith: Do you share
Professor Kemp's view to us, or his agreement with us, that west
of Shetland is not just about more reserves, but psychologically,
if we could unlock the west of Shetland, it would make a material
difference to the psychological approach in the market to the
investment in the UK Continental Shelf?
Mr O'Brien: I think that must
be right. There is a lot of interest, in fact unprecedented interest
last November when we had our latest round of licensing So there
remains a lot of interest in the UK as an exploration area, but,
of course, if we can develop west of Shetland and if we can commercially
identify reserves there that we are able to exploit, then that
is a really positive message, and that is why there is a west
of Scotland taskforce looking to unlock some of the potential
there that will enable us to get the interest from international
companies, including many of the smaller ones, to go and work
west of Shetland. I think Professor Kemp sounds to me to be right.
It is both psychologically and economically going to be good news
for Britain if we can, as a whole, ensure that we get access to
good reserves west of Shetland.
Chairman: Clearly, opening up those reserves
depends on the current markets, which, of course, as we know,
have changed quite dramatically. Colin.
Q192 Colin Challen: Given the recession,
how is the industry managing? Is it getting the borrowing that
it requires? Has any state intervention been necessary or been
considered?
Mr O'Brien: There are clearly
problems. For example, two of the key banks that have invested
in the past in the North Sea are RBS and HBOS, and both of them
have had problems. That is a good English understatement, so do
not laugh. Yes, it is the case that there are some difficulties.
So far, because we are dealing with, by and large, the larger
oil companies and gas companies, we have not seen any major problems.
We have seen OILEXCO get into difficulties—one of the companies—but
I am pleased to say that, as of this morning (nothing to do with
my appearance before the Select Committee), they have been bought
by Premier Oil, so that is very good news. Premier Oil is a company
which is well-known to us and will, I am sure, do a very good
job and, hopefully, will secure the future of OILEXCO. So we have
had that difficulty. What I am concerned to ensure, and we have
been engaging with BERR, the Treasury and also with the banks,
is that investment remains still available. We do not envisage
any serious problems for the large companies. Many of the smaller
companies are not UK based and get their finance from elsewhere
in any event, but where there are companies that have used RBS
and HBOS, we have seen the Bank of England interventions in January,
and to some extent in October, and we have also had the work that
is being done by UKFI to manage our involvements in those, and
it is clear that the North Sea and the UK Continental Shelf more
generally has been an area which has brought great profits and
benefits, by and large, so they tend to be good investments. The
difficulty is they also tend to be long-term investments, and
at the moment many of the banks are concerned about their liquidity
and are less anxious to tie up money for long periods. Is there
likely to be a difficulty round this? Yes, but let us not exaggerate
it, in the sense that the bigger oil companies and gas companies
will be fine. The smaller ones, by and large, will be the ones
that have difficulties, but not all of them are going to be reliant
on UK banks. So there is a sort of niche around there where we
do have some concerns—OILEXCO is an example—and we
have been engaging to ensure that we monitor very carefully what
is happening in the industry, who have got problems (some of them
are a bit reluctant to tell us whether they have or not) and what
the problems are, and we have also been engaging, not ourselves
but through the Treasury and BERR, with the banks in order to
ensure that the importance of the UK Continental Shelf is at the
forefront of the minds of the banks.
Q193 Colin Challen: The recession
has had a hand in depressing the oil price because the high costs
of the industry do not go down as well. Do you see that in the
longer-term that will be a self-correcting thing, that when the
recession ends the oil price will rise again? Do you see that
as being a suitable way for the self-correcting balance to return
to the industry?
Mr O'Brien: We certainly do not
want the spike we had last year to return, and that is my main
concern at the moment. If you look at the World Energy Report,
which came out last November, it says that there is likely to
be a long-term shortage of energy. It does not buy the arguments
around peak oil or anything like that, but it just says, inevitably,
as economies expand there will be constraints. What I said to
the Vienna Conference of OPEC last week was that it was enormously
important that we sustained, through the recession, the level
of investment necessary to put in place the infrastructure that
would be needed when economies begin to expand again: because
if we get cut-backs on that level of infrastructure investment,
we are going to face the problem that there will be greater capacity
constraints when the economies expand more than they would otherwise
have. Therefore, we are likely to face problems around spikes
if we do not get that investment sustained. The OPEC countries
said that they recognised the problem, they saw that their investments
were long-term, they saw that recession was temporary, they saw
that there was going to be substantial demand, that the very low
price of oil at the moment was something that was temporary. They
did not want to see the spike from last year happen again; they
saw it as damaging to the world economy. So I am hopeful that
OPEC, and investment more generally, and particularly in the North
Sea and UK Continental Shelf, will be able to be sustained during
this downturn. If you say, "Am I watching it carefully and
am I concerned?", the answer is, yes, I am watching it very
carefully and I am concerned. We are not picking up at this point
significant or substantial problems, but it would not surprise
me if at some point we did start to pick those up.
Q194 Colin Challen: I understood
you to say earlier on that gas storage facilities can act as a
cushion against market volatilities. You also mentioned that the
industry had asked you for some guidance, but you did not tell
us what the guidance was. It varies as to the size of our need.
We only have 13 days apparently, according to the press. Germany
has over 100 days, France has 80 or 90 days—I know the conditions
are different, but do we have an indicative target of how many
days storage of gas we should have access to when this can be
achieved?
Mr O'Brien: By and large, I think
that the description of gas storage in terms of days is complete
nonsense. The access to gas storage is not—. We have got
so much and we just pump it out. Some gas storage is fairly well
instantly accessible, some of it is medium-term, some of it is
long-term storage. In other words, it takes quite a while to access
it; it does not just come out. Therefore, what you have (and I
cannot remember the figures off-hand for last week) is about 19
days mid-term storage, I think, and probably 30 days in long-term
storage and you have by now, probably, about two or three days
in short-term storage. It varies substantially, and at this point
in the year we would expect there to be very low stocks in storage.
Why? Because we have just got through the winter and we have used
it. That is what it is there for. So I have no problem with the
level of storage falling at this point because they then stock
up during the summer and use it during the winter. That is the
way we use storage. What you cannot predict is when a crisis might
arise internationally, a Ukraine/Russia dispute. If it arises
in July, there are all sorts of implications. Probably less demand
for gas is probably one, but it is probably a bad time from Russia's
point of view to have a crisis, but it is the case that the level
of storage varies considerably at different points of the year.
What we need as a nation is to recognise that as we become more
dependent on imports, so we need more capacity for storage, and
if all the storage that we envisage comes to pass and various
companies are saying they are going to bring forward storage in
the coming years, then we will have a very substantial amount
of storage, and certainly in excess of the 20% of imports by 2020
that we currently have.
Q195 Colin Challen: All these volatilities
are not going to go away, even when the recession is over and
other circumstances change. Does the Government actually the have
concept of a strategic reserve for gas and for oil so that we
can weather passing storms? Is that just down to the market to
hopefully fill in the gap, or does the Government employ this
concept? The Americans do.
Mr O'Brien: They do. I am somewhat
sceptical of it, but I would not dismiss it. We have not for several
decades now had to have that concern because we have had access
to very large quantities on the UK Continental Shelf in any event,
so we have not had to have a concern that we needed to keep, as
I was talking to John about earlier, large amounts of oil and
gas in the ground just in case. I discussed earlier the practicalities
or not of that. What the Americans do is they have known reserves
which they just do not exploit, and they will then go in to exploit
them at some point in the future. During last year there were
various calls upon President Bush, as he was then, to release
the security reserve that the US has. We were not in that position
because, by and large, we have had North Sea oil and gas and,
therefore, that has just been there. We are now moving into a
new era where that will be depleted. It is not immediate, we will
be moving over a number of decades, and therefore there is now
a greater level of discussion about whether we should have some
sort of concept of a security reserve. Increasing gas storage
provides us with some element of a cushion. I would not describe
it as a security reserve, for the reasons I have explained, that
it goes down at various points of the year. Would you just lock
up large amounts of gas in storage? Who is going to pay for that—that
is enormously expensive—and who is going to construct the
storage, maintain it and adjust it: long-term artificial storage,
not underground? How are you going to do that? I think there are
a number of issues around that that probably need a greater degree
of exploration. At the moment my answer on a security reserve
is somewhat sceptical. Certainly that is not what we need now.
Whether we need it in the future I think we can talk about, and
I want to listen to the arguments on it: I want to know who is
going to pay for this and are we going to pay some oil gas companies,
pay them as a state, a large amount of money for holding it?
Q196 Miss Kirkbride: Can I take you
back to what you were saying about investment and just maybe a
little bit more detail. As you will be aware, almost every business
is anxious about the banks' ability to lend them money at the
moment and it does not help the banks that were involved are the
ones that are the most troubled. You said that you had been talking
to BERR and others about what help might be available. Can we
be clear what that is and whether any has been forthcoming so
far?
Mr O'Brien: What we know is that
for SMEs, for the smaller companies, there is the Enterprise Finance
Scheme (£1.3 billion), for larger companies there is the
Working Capital Scheme, and also, not particularly in terms of
oil and gas companies but on gas storage, as Colin was raising
with me, we have been talking to some of the companies about looking
to the European Investment Bank. What we know is that the European
Investment Bank has considerable reserves and we have been talking
to a number of energy sector companies who have said, "Our
bank says normally okay. This is a good project, but at the moment
we would like to get some security here." In terms of some
of the storage stuff, big enough projects to go to the EIB and
engage with them, in terms of, say, renewables and wind projects,
not really of sufficient size to go to EIB by themselves, but
if we bundle a number of those projects together they will probably
go to EIB because EIB only deals with very big projects; and EIB,
we are hoping, will give some indication about their receptivity
to energy projects because we need to ensure that we get the access
to the capital that EIB can provide to ensure that projects which
ought to go ahead, which would in normal circumstances go ahead,
which would have otherwise have gone ahead, are able to go ahead
despite the recession. You have got to be a little bit careful
here, because certainly from what I have seen in the market there
is a certain amount of delays and game playing, for all sorts
of reasons, in terms of prices lowering perhaps on the infrastructure
so people will delay for a few months to see whether a project
will go ahead. Some of these projects will still go ahead and
people are committed to them and the money is there, but there
are now delays in terms of people's gaming around infrastructure.
So you have just got to be careful about what really is a problem
and is a business saying, "Actually, if I delay this three
months, prices will go down a bit and I will be better off",
and that is a commercial judgment.
Q197 Miss Kirkbride: You said that
the big companies were fine.
Mr O'Brien: By and large, yes.
Q198 Miss Kirkbride: Why are they
getting access to money more easily?
Mr O'Brien: What happens with
the banks, the major investment banks, is if they have got a relationship
with a big successful client that they have dealt with over a
long period where there is a known relationship, the bank has
a large amount of information about what that client does, how
it deals with things, how successful it is. That is a strong relationship,
a long-term relationship. If, on the other hand, you get a company
that you barely know come to you about which you do not know very
much, the banks are then less likely to immediately say, "All
right here is a bundle of dosh."
Q199 Miss Kirkbride: So you are optimistic
that the Government schemes so far that have been announced and
hopefully will be producing some goods in the not too distant
future. There is enough money in those schemes, given the size
and the level of investment we need in the North Sea that the
North Sea oil companies, the smaller ones, will be able to access
those schemes alongside every other business in the country that
also wants to access these schemes at the moment.
Mr O'Brien: I do not say I could
say that I could guarantee to you that what we have done so far
will be enough. I think what we need to do is monitor the situation.
We are, as you know, in a situation now economically which is
probably unprecedented, probably the nearest precedent goes back
to the 1930s, and that was not even the same in the sense that
we have now got a global economy, and certainly in oil and gas
it is very global. So we are trying to manage our way through
something which is new for leaders and I think the UK have done
well. President Obama is trying to encourage other countries to
follow the way in which the UK has sought to put more money into
the economy and he, obviously, is trying to do the same. You heard
his speech yesterday. I think we have got to work our way through
what is clearly an economic problem of global and domestic importance.
Working our way through this does not mean that we can say, "Well,
we've done all we're going to do now and that's it". I do
not think we are in that position. We are going to have to keep
monitoring this situation and adjust our policy to ensure that
we do the things that need to be done to make sure this country
gets through these economic problems and out the other side in
a good state.
Chairman: I want to turn to the issue
of investment levels and the supply chain. There are many thousands
of jobs downstream of the oil and gas sector and they are a very
important part of our economy.
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