SIC LEADER Gary Robinson says BP needs to be “up front and honest” with the people of Shetland about its plans for Sullom Voe after the local authority was frozen out of talks on the future of the strategically important Schiehallion field.
A BP spokesman told Shetland News that “commercial confidentiality” was the reason for keeping the council in the dark.
Robinson said he was “astounded” by that statement, saying it was wrong for oil industry companies to exclude the SIC when it is the operator of Sulllom Voe’s harbour.
Yesterday it emerged that BP and its partners had decided the production of oil from the Schiehallion field would permanently bypass Sullom Voe in favour of Rotterdam.
Robinson said it was wrong for the company to be happy for news of such significance to “just trickle out into the community”.
Despite being a member of the Sullom Voe Association and, historically at least, a key player in Shetland’s oil and gas sector, the council was informed of the Schiehallion decision on Friday afternoon.
“It was not any kind of consultation, just this is what’s happening,” Robinson said. “I’m hugely disappointed that they’re trying to say they couldn’t tell us because of confidentiality.
“Certainly in the past we’ve been kept in the loop, and so far as I’m aware we’ve never betrayed a confidence that would give BP justification for cutting us out.”
It is only three weeks since BP announced initial oil from the refurbished Schiehallion would go to Rotterdam for technical reasons.
At that time the company stressed no longer term decision had been taken, but Robinson said there had been “rumours circulating for weeks”.
“Rumours are not good for anyone – they should have been honest and up front, and said this is what we’re doing,” he said.
“In the first instance there needs to be dialogue between the council and the industry, but beyond that there needs to be a proper understanding of the impact on the community and the concerns that the community has.”
Schiehallion accounted for 20 per cent of tanker movements at Sullom Voe prior to production halting in 2013. The refurbished field is due to resume production by the end of next year.
The council described the loss as being of “enormous significance” to the income the terminal generates, though Robinson said he didn’t think the community should be “too downhearted because clearly there is a future for the terminal” with the Clair Ridge project reliant on it.
It is likely to mean harbour charges for the remaining traffic will increase because the SIC can’t subsidise the port, Robinson said, and he called for BP and its partners to open up.
“There’s a real need for BP to come around the table and have a very frank discussion with us about the future,” he said.
Robinson said a harbour equalisation fund to deal with peaks and troughs in income had been designed for a terminal that would be shut down by 2007.
“We’re now in 2015 and we need to find another method of supporting the port. It can’t be from council subsidy – we could only do that [by taking] from other services, and I don’t think anybody would be pleased if we came out and said we’d subsidise it from education or social care.”
Work on the future ownership model of Sullom Voe’s harbour kicked off under former council finance chief James Gray, and Robinson said all options remained on the table.
At yesterday’s policy and resources committee meeting, north mainland councillor Alastair Cooper said he felt even floating the idea of selling the port sent out the wrong message to industry.
But Robinson disagrees: “I think we really do need to establish what the best outcome for the harbour is, and whether the harbour is an asset or a liability in the council’s hands, and there’s an ongoing piece of work that should get to the bottom of that.
“Alastair is entitled to his view; I don’t agree with him. I think that’s an option that we do have to consider – if anything this latest decision around Schiehallion perhaps strengthens that view.”
Northern Isles MP Alistair Carmichael said he had written to Oil and Gas Authority chief executive Andy Samuel calling for a meeting between industry and community interests.
“The loss of Schiehallion’s business is bad news for the local industry and the winder community,” he said.
“I fear that with low oil prices and North Sea companies cutting down on operating costs, we could see more bad news like today. It is vital, therefore, that we address these problems immediately so we are prepared for any more shocks in the industry.
He said that both the industry and the Shetland community needed a viable and stable terminal at Sullom Voe and therefore “we have a common interest to pursue”, adding the Oil and Gas Authority “need to act with some urgency”.
Meanwhile, Wir Shetland – the newly formed group seeking autonomy for the islands – said BP’s Schiehallion decision “outlines in stark relief the need for self-governing powers urgently to be devolved to Shetland”.
Its chairman John Tulloch said there would be a “customary stampede of politicians attempting to save face by salvaging something from this disaster”.
He said it could have been prevented if Shetland had control of its exclusive economic zone as consent for BP to exploit the field “would have contained the condition that all associated oil and gas processing must be done in Shetland”.
Wir Shetland claims Shetland’s zone could be to a 200-mile limit, while others contend autonomy would result in only a 12-mile sphere. Schiehallion lies over 100 miles to the west of Shetland.
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