14th August 2018
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After two years, oil firms agree to meet council

, by , in News, Public Affairs

Oil companies at Sullom Voe have indicated a new willingness to enter talks with the SIC on the future of the terminal after the local authority stung them with a 17 per cent increase in tanker charges. The new mood follows the revelation earlier this month that council requests for meetings on the subject had been snubbed for over two years.

SIC chief executive Morgan Goodlad told councillors on Wednesday he had now received letters from the oil industry expressing an interest in talks which the council hopes will result in a new system for earning income for operating the port of Sullom Voe safely as tanker traffic declines.

The 17 per cent hike in charges was rubber-stamped by the Full Council but not before councillor Jonathan Wills tried to ramp them up by 37 per cent instead, which is the level the council claims it would need to restore the projected £2.4 million profit to the £4m it used to earn from running the port. He said he did not see why the council should effectively give super-wealthy BP a “subsidy” of £1.6m by not charging the full amount.

Dr Wills found no support for his plan, partly due to his colleagues’ hope that the new era of co-operation with the oil companies will yield results. Convener Sandy Cluness said: “If we’re talking to them now I think that’s the best way forward.” Councillor Gary Robin­son agreed, saying the last thing needed was for the dialogue to be held in a hostile environment.

The 17 per cent increase in tanker charges is being applied because fewer ships will visit Sullom Voe in 2009/10 than the oil industry forecast, throwing the council’s budget calculations into chaos. Oil from the Schiehallion field is to be cut off for up to five months while repairs are done offshore. Despite fewer ships the council still has to provide full tug and pilotage cover all year round for the terminal to prevent disastrous accidents.

The council’s harbour charge is levied on the gross tonnage of the tankers and is paid by the buyer of the oil to be carried, not the terminal or the oil companies, but high charges could make Sullom Voe less competitive as it tries to secure new business. The charge for 2009/10 is to be 84 pence per gross tonne and £1.01 per tonne for non-segregated tankers like gas carriers. Fees for the use of tugs are up to £70,574 for the biggest tankers.

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