Cautious optimism voiced by council convener over new Sullom Voe deal

The council’s convener says he is “cautiously optimistic” about the future of Sullom Voe, following today’s news oil and gas company EnQuest is to take over operating control of the terminal.

Malcolm Bell has spoken after the announcement BP is passing on a three per cent share of the site to EnQuest, as well as a quarter of its 100 per cent stake in the Magnus oil field.

The deal means “operator-ship” of Magnus and infrastructure assets, including Sullom Voe, are being handed to EnQuest, and staff who operate and support the assets are expected to transfer as part of the arrangement.

Around 100 BP staff are associated with Magnus and associated infrastructure, and approximately 240 with the Sullom Voe Terminal.

The deal is likely to be finalised at some point in 2017 – although industry watchers should expect most of this year to pass by before the formalities, including staff consultation and various legal agreements, are signed off.

Oil throughput, and the levy that comes to council as a result, are likely to be included in the talks. It is understood that, at this stage at least, there is no indication that is going to change.

Mr Bell said: “It’s not a surprise and it’s not going to make an immediate difference to jobs. It may even make a positive impact on jobs. They [EnQuest] will act quite aggressively in seeking out new business.

“We still expect the terminal to be there in 2050 – that’s the current expectation – and possibly beyond that. We are not talking about the demise of the terminal.

“Clearly the North Sea is getting towards the end of its life, there’s no secret in that. EnQuest are there and that’s their speciality in maximising things when things are getting towards the end-phase.

We’re entering a different phase in a new era. It’s the end of an era and the start of a new one.
“We hope and plan to develop as good a relationship with EnQuest as we had with BP over a number of decades.”

In a council statement, the convener said: “We have a positive relationship with BP which we have sustained over many decades. We now look to develop that with EnQuest and to that end the leader [Gary Robinson], the chair of development [Alastair Cooper] and myself will meet with EnQuest on Thursday.
“We look forward to developing with them a sustainable future for the Sullom Voe Terminal.”

Mr Bell’s comments came as Unite regional officer John Boland reacted to today’s news.

“Many people will look on this news as the end of an era, given BP’s long association with the Sullom Voe Terminal and the Magnus field. It was discovered by BP way back in 1974 when the company was still owned by the public.

“BP has said it will now start consultations and Unite is pledged to making sure the rights of our members are protected in any transfer. We are clear – there should be no change to the terms and conditions of any worker moving over to employment by EnQuest.

“When transfers like this happen, there is often a concern about potential job losses. We strongly hope that is not the case here, and we will be talking with BP and EnQuest to get a clear idea of their plans for the future so our members are fully informed.”

Mr Robinson described the development as “the end of an era” for the oil and gas industry, although he insisted it marked the beginning of a new one.

“The significance for Shetland cannot be underestimated,” he said.

“This is a positive opportunity for the future of Shetland. It’s a big change for Shetland and for Sullom Voe Terminal. EnQuest are known for managing end of life assets and extending their life. They will have the opportunity to focus on Sullom Voe Terminal and attracting new business, particularly from the west of Shetland.

“The council and the wider Shetland Partnership will be working with them to realise that opportunity. We are now looking to EnQuest to develop the arrangements at Sullom Voe Terminal to provide a competitive environment for opportunities to the west of Shetland.”

Mr Cooper stated: “The council will maintain its focus on the protection of Shetland’s environment, and we will work with EnQuest through SVT Ltd to embed this in the transfer of the existing legal agreements with the operator.”