Just a few days ago, I was talking about North Sea industry leadership to a bunch of Aberdeen Business School students. My argument was simple: the UK’s offshore industry represented a rare example of companies, relevant trade organisations, Government and even trade unions working together in a sustained way towards a set of common goals.
For most of the 20-odd years that I’ve been scribbling about Big Oil, there has been a major initiative of one kind or another going on, especially CRINE (Cost Reduction Initiative for the New Era), successor CRINE Network, the Oil & Gas Industry Task Force (OGITF) and steering group PILOT with its portfolio.
Indeed, it has rather become the normal state. That’s an odd contradiction, bearing in mind that such initiatives were born out of a succession of crises.
Each has, in its different way, brought sharp focus on myriad aspects of the sector, with working parties and entities such as the Industry Technology Facilitator (ITF); supply-chain efficiency initiative LOGIC (Leading Oil & Gas Industry Competitiveness), and supply-chain gateway FPAL (First Point Assessment).
A core mission for each has been to cut through and reduce bureaucracy – corporate and public-sector – including generating standard forms of contract and other frequently used paperwork.
Each has been very much about sharing – seeking fairness and avoiding ripping off.
Much play was made of the need for big players such as BP, Chevron, Shell and Total to move over – to make space for small and medium-sized companies better able to exploit older oil&gas production assets on their last legs and to explore/open up marginal discoveries.
One of the bones of contention has, of course, been access to infrastructure, including pipelines. Fine words have been uttered and protocols drawn up with a view to ensuring equity – fair treatment – especially between majors and minnows, few of which have the resources, let alone the clout, to slug it out in the ring.
I have been party to private conversations where the CEOs of small players with an itzy-bitzy asset in the grand scheme of North Sea things have vented their spleen against infrastructure owners seeking to hold them over a barrel for access to pipeline infrastructure, especially.
However, none have been willing to go public lest they be singled out for special treatment by their larger brethren.
That Endeavour has broken this fearful silence by seeking arbitration over its battle with Nexen concerning gas transportation infrastructure access charges is both refreshing and disturbing.
It’s refreshing because someone has at last spoken out and may force the issue once and for all.
It’s disturbing on two counts: that the fine words and voluntary protocols are not having the effect that Oil & Gas UK was hoping for, and that Nexen, itself a relative newcomer, tried to take Endeavour to the cleaners.
Of course, we don’t know the detail, but the very fact that infrastructure access is apparently included in the Energy Bill that will, in due course, go before the newly re-formed UK parliament is a measure of what is festering below the surface.
As a DECC spokesperson told Energy’s parent, the Press and Journal, a few days ago: “Gaining access to existing infrastructure on fair and reasonable terms is critical to the development of the many smaller and challenging fields that must come forward if we are to fully develop the UK Continental Shelf.”
The current arrangements for an applicant to get the Secretary of State to determine fair tariffs and terms are, at the very least, cumbersome, as is evidenced by just a single application being made in the past 40 years despite the many cases of frustration and delay to investment over that period.
It is to be hoped that all operators in control of infrastructure realise their responsibility in this regard. If DECC decides to put the boot in with some, they will only have themselves to blame.
IN OUR All-Energy show edition, we paid particular attention to safety and the need for much tougher competency standards than those that are currently applied by offshore wind project developers.
The basic safety competency training package for offshore oil&gas workers is three days. However, the one that Renewable UK currently offers lasts for just one day.
Both courses are about ensuring that an individual working offshore has some sort of a chance of dealing with an incident, whether “simply” coping with accidentally falling off an installation into the sea or something more serious, such as major equipment failure that results in injuries and perhaps even fatalities.
The only fundamental difference between offshore oil&gas and offshore wind is that one handles hydrocarbons while the other generates electricity. Both are extremely dangerous in their different ways.
I was criticised by certain renewables-community individuals at All-Energy for having the cheek to raise the subject of basic safety competency, and doubtless OPITO’s group CEO, David Doig, got it in the neck, too.
But Energy is not letting up on this one. There have been offshore wind-related accidents, notably the recent vessel fire at the E.ON-operated Robins Rigg windfarm in the Solway Firth.
However, it seems that only E.ON has so far put its emergency-response/safety system to the test, at least at the benchmark Petrofac facility in Aberdeen. This is in sharp contrast to the offshore oil&gas brigade, who long ago accepted the need for their emergency-response systems to be tested and evaluated regularly.
I hope the Health & Safety Executive’s offshore safety division will take definitive action to implement common baseline competency standards – preferably soon. And I hope RUK ultimately understands why this is necessary.
