Many working in the North Sea have still to recognise the full impact of $50 oil and the crisis affecting the sector, according to one senior industry figure.
Speaking exclusively to Energy Voice, Mark Richardson, Apache North Sea project director, said: “The lower-for-longer scenario is in place. I don’t think that reality has really sunk in for some yet. People are going to have to change the way they do business.”
He added: “There are many in the industry who do understand that things have to change. There is a crisis right now, but that means it’s actually a good time to convince people to make the changes.
“In the way you approach doing business you to keep thinking how to make it faster, cheaper, better and safer in the way you approach doing business.”
Richardson said it was important to learn from historical trends and understand that oil has averaged in a price range of $50-$60 per barrel.
“People don’t really have a clue what the oil price will be in the future. There are so many variables it is almost impossible to make an accurate forecasts.
“If you ‘hindcast’, you will see the average oil price since 1973, when OPEC was formed, is somewhere in the $50 per barrel. I think that is probably where it’s going to sit for the next few years.
“You may get swings up to $100 and lows down to $20, but there’s no reason why that long-term average should not continue.”
The oil industry continues to reel from the effects of the oil price slump which has seen more than 6,000 jobs lost this year in the north east of Scotland.
Earlier this year, Energy Voice reported that 800 people had applied for an office administrator role – highlighting the changing jobs market that in early 2014, was struggling to find people to fill roles.
Hopes of an oil price rally appear increasingly forlorn as Saudi Arabia and OPEC continue to keep the oil pumping. Oil inventories in developed countries have expanded to a record of almost 3 billion barrels because of massive supplies from both OPEC and non-OPEC producers.
Apache in the US has been hampered by the pressure on the US shale market brought about by Saudi Arabia’s policy. Apache, is one of the biggest leaseholders in the largest US shale play, has seen its share price battered in 2015 as a result.
Industry analysts have warned that US producers’ ability to quickly ramp up production in response to any oil price increase will ensure that – unforeseen circumstances notwithstanding – the longer-term oil price will remain relatively low for a longer time.
Last month Apache announced it had made significant discoveries in the North Sea in both the Beryl and Forties fields which could yield up to 70 million barrels of oil equivalent, extending field life of both into the 2030s.
Richardson said he said it was crucial young people remained positive about working in the oil and gas industry.
Apache is one of the few operators in the North Sea that has so far avoided reducing its headcount in the North Sea. Last week, he addressed a gathering of more than 100 young professionals at Apache’s regional headquarters in Aberdeen, insisting opportunities were still out there.
“Young people are the life blood the industry. We absolutely need to engage as an industry and make young people aware, through the universities and colleges, that oil and gas continues to be a major employer.”
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