British Industry and the North Sea: State Intervention in a by Michael Jenkin

By Michael Jenkin

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29 In the event, a total of nine drilling rigs were ordered from British yards during the period I965-7. 30 Yet with the exception of this set of orders, the level of engagement of British firms in the North Sea supply market remained low during the late I96os. In particular, British firms were slow to become involved in the many engineering and contracting aspects of the development phase for the five gas fields that were discovered in the southern North Sea. 31 Indeed, oil companies complained of not being able to obtain even the most elementary supplies of equipment and materials from UK sources.

It is possible, however, to make some generalisations about these relationships on the basis of published information. The offshore supply industry is essentially a huge sub-contracting network. The oil companies are at the centre of this network, surrounded by successive layers of contracting firms such that the firms in each layer accept more specialised supply work than firms in the previous layer. Contrary to what the layman might expect, the oil companies are not extensively involved in the details of purchases from the offshore supply industry.

22 Given this early lack of information about the offshore supply industry, it is hardly surprising that the Government did not make any efforts to assist the industry directly during this period. However, there was one early attempt to remedy government ignorance regarding the industry and the offshore market. In 1967 the Ministry of Power asked a prominent American oil executive to write a confidential report assessing the level of British participation in the southern North Sea gas developments and any problems which British suppliers had encountered in that market.

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