A major operator’s recent contractor rate cuts announcement has been heralded as the start of an industry-wide phenomenon and the news has hit the headlines, particularly in Aberdeen, where industry is understandably sensitive to the ups and downs of the oil and gas market.
The fire at Didcot B Power Station on Sunday (19 October) has taken half the station’s 1360 MW capacity offline for the foreseeable future as damage is assessed and then repaired. But what does this mean for the market?
If I could make one change that would reap potential benefits, it would be to eliminate cash from society. Sounds radical and almost certainly impractical, but let me try and explain.
“People are our most valuable asset”. People, people, people. You could be forgiven for thinking your CEO meant you. Oil prices are now down, not least as China’s growth has slowed. Did your CEO actually mean the people of China are his most valuable asset? Corporate values are under pressure. Brent crude is now trading nearer $80 than the $100 we have got used to. What is the risk of core values now being decommissioned?
This week I stated that UK energy policy is a slave to flawed climate action. Our present course to meet the 2050 EU carbon emission targets will result in both a failure to meet the targets and the failure to keep the lights on. And that we need to release the energy industry, scientists, researchers, policy makers and business from the straightjacket of a consensus zealously guarded by a “green blob”.
It is perhaps the trait of an eternal optimist to focus on one piece of good news during bad times, but that is exactly what the North Sea needs to do right now.
Kevin Lacy is still haunted by the Deepwater Horizon disaster -- by the lives lost, the families devastated and the environment despoiled. He describes the images of the giant, burning rig as looking like “something from Pearl Harbor.”
So Shell is wielding the axe, chopping 15% off UK North Sea direct contractor rates.
Oil and gas expert Alex Kemp said BP's announcement about Kinnoull was a much-needed boost for the North Sea industry.
I am not so sure that companies in the UK continental shelf are biding time but the market has stalled for a number of reasons.
In the run up to the referendum there were wild stories and reports in circulation about vast untapped and undiscovered oil reserves lurking in the depths of Scotland's seas.
When Russia cut off natural gas supplies to Ukraine in a disagreement over unpaid energy bills in the winter of 2009, many countries in eastern Europe were plunged into freezing cold. At the time, 80% of Europe’s gas flowed from Russia through Ukraine and the supply interruption left Bulgaria, Croatia, Greece, Romania and others without their primary source of heating. While Moscow and Kiev played a blame game for the crisis, people had to find an alternative solution and went back to wood burning fires to keep warm.
National Oil & Gas Skills Week is just a few weeks off and one is given to understand that this initiative by Opito is not receiving the kind of support that had been expected.
I was in Hamburg recently for the biggest wind power trade show in Europe with 33,000 people attending and 1,500 companies exhibiting.
It was only late last month that Oil & Gas UK released its Economic Report 2014, which we hope provides the definitive guide to the current status and future prospects of the offshore oil and gas industry in the UK.
Last month, I discussed the challenge of the severe weather associated with hurricanes. We were reeling after an early storm struck Scotland, with some rigs in the North Sea recording 9m (30ft) seas. Since then we have been enjoying a warm, dry September, though sea-fog impacted offshore flights.
Well, that's that - it's over - and I mean over.
As conventional oil and gas reserves have declined across the world, more and more operators are turning their attentions towards unconventional reserves.
Total trade between the UK and Kenya has risen to £1billion this year, according to UK Trade and Investment figures. The internal Oil and Gas market in Kenya is poised to develop, creating waves of optimism. Steady streams of opportunities have opened up across Africa in the last decade. Oil and Gas exploration is becoming increasingly important to East Africa, which until this decade has been in the shadow of both West Africa and North Africa. The Kenyan government has recently taken steps to safeguard its tax return from hydrocarbon and mining industry activities. The Kenya Finance Bill 2014 has been passed by the Kenyan Parliament and agreed by President Uhuru Kenyatta. It means that capital gains tax (CGT) has been reintroduced for the first time in nearly 30 years. The standard rate of CGT in the country will be 5%, but the Oil and Gas sector will be taxed at 30% or even 37.5% depending on the company’s tax residency status. Introduction of the CGT means that the previous withholding tax regime is now abolished and popular ‘farm-out’ agreements, which are between resource owners and outside companies providing services, can be completed in a more tax effective way. These transactions are currently taxed at 10% or 20% of the gross investment with deductions. From 2015, a company making an acquisition will be taxed at 30% on the net gain once the initial cost of acquisition is deducted from the sales value. An amendment may be made to future finance bills to include the additional costs incurred up until the time of sale.
It took only two days to choose the Pope. Where is the new energy regulator?
The waiting is over. Scotland has voted ‘No’ to independence.
The oil and gas industry is a fundamental part of the Scottish and UK economy, a fact only highlighted through the referendum campaign. It is therefore important that the governments work together to swiftly implement the recommendations of the Wood Review to minimise uncertainty and create an environment for maximising the recovery of oil and gas in the North Sea, for the long term benefit of the UK and communities in which these businesses operate. The industry must also continue to focus on cross-sector efforts to bring escalating costs under control to protect and enhance the long term prospects of the industry and thereby the Scottish and UK economies as a whole.
REVISED 14.00 FURTHER REVISED 17.40 TO TAKE ACCOUNT OF SALMOND RESIGNATION
Growing up in California, politics was something we discussed openly as a family around the dinner table, and I can still clearly recall the overwhelming sense of pride I had when I cast my first ever ballot as a registered voter.
For most, the day came and went; that same Monday morning feeling, discussions about the weekend, goodbyes before going offshore again. But for a few, the day had been at the top of minds for months.