Pub quiz regulars should file 2016 away in the back of their minds, as the year just passed will be a popular answer in future, a North Sea industry chief has said.
Deirdre Michie, chief executive of Oil and Gas UK, said 2016 was an “eventful” year in the world of politics, world affairs and celebrity.
Ms Michie said the oil and gas industry was no different, with capital investment falling dramatically, exploration and appraisal drilling floundering at an all-time low, and companies making tens of thousands of employees redundant.
Speaking at the Southern North Sea Conference and Exhibition in Norwich, Ms Michie was reflecting on the 12 months that had gone by since the previous year’s event.
Ms Michie said: “I have heard people say the first rule of 2017 is that we don’t talk about 2016.
“And as somebody reflected on Twitter: in 20 years’ time, when you’re in a pub quiz and a question starts with “in which year…”, you just answer 2016 and you will be right.”
But Ms Michie pointed to some key indicators showing that the oil and gas sector is in a more competitive position than it has been in for years.
She said the cost of extracting a barrel of oil had dropped 45% since 2014 and that almost two-thirds of those savings would be sustainable.
Ms Michie accepted some of those savings had come from “squeezing” rates and contractors, but that a significant amount had come from companies changing the way they work.
She highlighted Nexen’s new offshore scaffolding system, which has reduced man hours by 66%, as a shining example of efficiency.
Ms Michie also revealed that a new method of sealing wells by melting components was being trialled onshore and could reduce the cost of well abandonment in the North Sea by more than 50%.
Andy Samuel, chief executive of the Oil and Gas Authority, acknowledged that exploration was low, but said the picture was not completely bleak.
Also speaking at the conference, Mr Samuel said: “We’ve heard a lot about exploration being at an all-time low and it’s still very low, but actually, we’re at an all-time high in terms of success rates.
“In the last two years we’ve seen more successes than we’ve had for decades, along with some very interesting discoveries.”
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