Thursday 21 July 2016 5:06 pm

North Sea oil firms urged to revisit contingency plans after Brexit vote

Companies operating in the North Sea are being urged to revisit contingency plans drawn up amid fears of a sustained oil price rout, following the Brexit vote.

Crude fell as low as $27 per barrel in January, nearly 80 per cent below its peak in June 2014. This forced firms in the basin to think about their ability to cope with an increasingly unpredictable future.

More recently, falling US oil output, as well as supply outages around the world, has helped the black stuff spring back towards $50.

Read more: Enquest plans stake sale in North Sea project to Israeli billionaire's Delek

But Britain's vote to leave the European Union means many will have to dust off their contingency plans.

The referendum outcome will whittle down costs for many producers there due to a weaker sterling. But this silver lining could be eclipsed as increased uncertainty starts strangling investment.

Read more: Date set for first North Sea oil strike in a generation

Katie Williams, oil & gas and employment partner at law firm Pinsent Masons, said: “Smart employers will be thinking very carefully about future-proofing their business so that they remain agile and are able to react decisively to a possible lack of investment and the changes the next few years will bring.”

“Some of them have already started this process due to the downturn in oil prices but Brexit gives added impetus to look at how reactive and proactive their organisation is.”