Oil and gas firms need a “cultural shift” to make the most of the North Sea’s potential, according to a new report.
Business advisory firm Deloitte says new regulator the Oil and Gas Authority (OGA), the UK Government and companies should adapt to “a new reality in the basin”.
Research by Deloitte into the industry’s reaction to Sir Ian Wood’s Maximising Recovery Review showed strong support for the OGA as well as a stable, simple and internationally competitive tax regime.
Firms also said closer collaboration would help drive efficiency and cut costs, while tax breaks and possibly new ownership models could encourage the sharing of infrastructure.
Derek Henderson, senior partner in Deloitte’s Aberdeen office, said: “The UK’s oil and gas industry is going through a serious period of transition.
“Its three major stakeholder groups need to change significantly and adapt quickly.
“There must be more collaboration both between and within the groups, with companies working together to make extraction more economically viable, and increased coordination between departments at Whitehall.”
The report also says drilling activity in the UK North Sea needs to double to more than 90 wells a year over the next two decades to make the most of the estimated £830billion-worth of oil and gas yet to be extracted.
Mr Henderson said: “Only about a third of the known recoverable resources in the UKCS (UK continental shelf) are left.
“The easy oil days are gone and we need a fiscal regime that is more reflective of the current state of the basin.”
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