Norway’s Edvard Munch should really be Planet Earth’s artist of 2016. How many of us have woken up this year with facial expressions similar to Munch’s The Scream as world events unfolded before our eyes? The sad losses of David Bowie, Prince and Leonard Cohen. And the sensational outcomes of Brexit and the US Presidential election. Not to mention the see-sawing of expectations in Aberdeen.
It’s nice to be nice or so my mother always told me. A relationship built on courtesy, respect and trust will always be much stronger. In today’s new norm of a lower, for longer oil price, we need robust relationships across the supply chain more than ever. It’s all very well talking about collaboration and co-operation but, if we don’t have mutually beneficial relationships, we’re unlikely to be able to achieve the collaboration that will deliver the results required for a successful and sustainable supply chain.
The collapse of oil prices has forced the U.S. shale industry to slash production costs. In order to improve the "breakeven" costs for the average shale well, the industry has deployed three general strategies: improving techniques and technology, such as drilling longer laterals or using more frac sand; focusing drilling on the sweet spots; and demanding lower prices from oilfield service companies. All three of those strategies led to a decline in the breakeven price for a shale wells.
Scottish Renewables is excited about the fact that a bunch of firms in Scotland have pulled around £125million of contracts from around the globe lately.
The last eighteen months has marked a period of market shifting volatility in the Oil and Gas sector globally. Oil prices have remained low and unstable and organisations with exposure to the UKCS have been especially affected given the basin's maturity and its relatively high cost base.
Venezuelan President Nicolas Maduro, along with Iran, has called for an OPEC summit early next year to "establish a new mechanism in setting oil prices.” He gave no clue what that mechanism might be, although he did observe that oil producers do all the work, while someone else sets the price and makes the profits.
That’s winter here with a vengeance and hopefully 2016 will be over before we can blink. Why? Because it’s been a hard year in our oil & gas bubble and one we will not be sorry to put behind us. We’ve all had to dig deep and put on our best game face, but there are very positive signs going forward for those who have thus far survived the current upstream downturn.
With Trump at the helm, sentiment gives way to practicality in the energy industry. For the vast untapped potential of the nuclear energy industry and the uranium that feeds it, this could contribute to a market-disrupting revival that no longer bows to fear and the politics of economy.
OPEC’s agreement to cut output for the first time in eight years has helped push up oil prices by nearly 10 per cent in the last week, but will the agreement hold and how will it impact UK business?
The negative effects of the Oil & Gas downturn are all around us – but more positively, we are also experiencing the need and the benefit of becoming much more efficient in managing and running all aspects of our businesses. The Maximising Economic Recovery effort has gained momentum. We have seen average lifting costs gradually fall amongst the operators, green shoots of greater collaboration are starting to appear across the industry – and crucially we see the need for more efficiencies, higher productivity, increased innovation and technological improvement in what will be the next chapter of our industry.
Last month, Decom North Sea once again hosted a sell-out Offshore Decommissioning Conference, alongside Oil & Gas UK.
As 2016 draws to a close, I find myself reflecting on what the future holds for us all and how increasingly urgent it is that we must adapt if, as a species, we are to remain viable.
What does the election of Donald Trump to the Presidency of the United States of America mean for the oil & gas sector? An end to OPEC perhaps?
Soren Skou doesn't hang around. Shortly after he became chief executive of AP Moller-Maersk A/S in the summer, the Danish conglomerate said it would separate its transport and energy activities.
It’s coming down the wire.
Peak demand for oil is the big new thing. True, the International Energy Agency, in the annual World Energy Outlook it released earlier this month, didn't envision a peak coming before 2040 barring a big acceleration in anti-climate-change efforts. But at least it's talking about the possibility, and forecasting a slowdown in demand growth in the meantime.
LNG to Power is an effective, flexible solution to the expanding demand for power, particularly in developing economies, with interesting challenges as it combines traditional elements of the LNG value chain with the downstream power market. Floating regas is growing as an answer to address LNG to power issues.
Despite Professor Alex Kemp’s justification for decommissioning tax breaks, any break is a very poor deal for the UK taxpayer. Current levels are set at 75% or 50 % for respective petroleum revenue tax (PRT) paying and non-PRT fields. With estimates of the total decommissioning cost at ca £40billion, the taxpayers’ portion is, by any fiscal measure, a huge sum of money. It equates to approximately £1,000 per UK taxpayer. Furthermore, should decommissioning costs increase, as many suspect they will, the risk to the taxpayer is obvious.
As the dust settles on Philip Hammond’s first (and last!) Autumn Statement, it is worth taking stock of the impact of the announcement on the oil and gas sector.
It would seem logical that if the UK’s once largest corporation tax payer was going through a difficult time, the UK Government should be trying to do all it can to support it and boost growth and future developments.
I don’t think the industry was expecting any major changes to the fiscal regime for the North Sea today, given the overhaul we have seen over the last two Budgets.
Next year will mark 50 years since first gas at West Sole, the UK North Sea's first producing field. Since oil prices crashed in 2014, however, pessimism has descended upon the industry like a thick North Sea fog, obscuring five decades of achievement. The 2004-14 boom decade left a legacy of unsustainably high costs, followed by painful restructurings and even outright bankruptcies. UK production levels have fallen over 60% since the peak, investment levels and tax receipts even further, and 120,000 jobs have been lost. 2016 will be the fourth consecutive cash flow negative year, severely curtailing new exploration and development activity. Little wonder the North Sea is widely seen as a busted flush, condemned to a grim future of costly decommissioning.
When a massive country de-nationalizes its entire energy sector and opens its oil and gas doors for the first time ever to foreign companies, the opportunities are staggering.
As Europe’s offshore oil and gas capital, our region has a well-earned reputation for enterprise and innovation, but the eventual depletion of North Sea reserves over the next 25 to 35 years gives us a serious long-term economic challenge.
EY’s Derek Leith explains why it is unlikely we will see any further changes to the North Sea fiscal regime in the Autumn Statement 2016. However, the oil and gas industry will have huge interest in what the Chancellor has to say on the many other pressing issues affecting the wider economy.