The Oil and Gas Authority (OGA) has slammed “poor behaviour” in the North Sea supply chain, with firms facing demands to cut rates as much as 40% “overnight”.
Interventions are being made by the regulator with some operators and Tier 1 contractors whose practices risk putting small suppliers out of business.
Companies have widely cut costs in light of the latest downturn, caused by Covid-19, with much UK work being deferred and pressure being placed on suppliers.
Supply chain director Stuart Payne has been urging firms to flag their concerns, as poor contracting behaviours “destroy any opportunity for recovery” in the North Sea.
Some firms have doubled the time for their payments to be made, while others have “written and demanded 35%, 40% cuts in rates overnight”.
