North Sea firms face the “harsh reality” that it may take “two to three years” before the industry will catch up on deferred work, according to Oil and Gas UK (OGUK).
Outlining the situation for the sector, which has been hit hard by projects being postponed with the downturn, OGUK operations director Katy Heidenreich said work for 2020 that has been deferred a year may need to “compete” with that already earmarked for 2021.
The impact means a potential knock-on effect which could take “two to three years to catch up”.
Earlier this week it was confirmed that Phase 2 of CNOOC’s Buzzard development, scheduled for first oil this year, has been deferred to 2021.
It comes amid repeated warnings about the health of the supply chain which was still recovering from the last downturn when Covid-19 hit.
Ms Heidenreich said: “We went into this from a much more competitive place but there is a harsh reality we need to face.
“Much of 2020/21 maintenance activity is likely to have been already awarded. Unlocking further opportunities that are not already in company business plan will take time.
“Deferred opportunities may need to compete with projects already earmarked for 2021. It may take two to three years to catch up.”
Ms Heidenreich made the comments on deferred work during the OGUK Road to Recovery webinar on Thursday for the UK North Sea sector.
Meanwhile, OGUK said around a third of North Sea companies have stated that more than a third of their remaining activities for 2020 “are contingent on the ability to get more people offshore”.
To date around 50% of UK work has been postponed in light of the downturn,
Although manning levels are increasing, platforms generally cannot return to full capacity due to Covid-19, which is why OGUK has been pushing for asymptomatic testing industry-wide.
Ms Heidenreich added: “Around a third of companies say that more than a third of remaining activities are contingent on the ability to get more people offshore.
“Slightly more 2021 activities are also dependent on the ability to increase offshore personnel.
“2021 planning is assuming more people offshore, so prolonged low manning will lead to further deferrals.
“Improving visibility on drilling plans is very difficult. Plans are still very much under scrutiny.”
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