There is no doubt that the oil and gas sector is facing challenging times – on-going cost pressures and the fall in oil prices are reducing margins for both operators and supply-chain companies, and it is important that Government does everything it can to support the industry during this period.
I believe that North Sea oil is a fantastic asset for Scotland and will continue to be so be for decades to come.
There are up to 24 billion barrels of oil and gas equivalent remaining, and it is essential that we have stable and proportionate fiscal regime which encourages the investment, innovation and exploration required. This is even more important in light of the recent job losses in the sector.
Two oil workers have been killed in an explosion and fire at an oil rig in Oklahoma.
Another two members of staff have also been critically injured.
Authorities said the explosion happened at the rig about two miles west of Coalgate, about 100 miles south east of Oklahoma city.
Offshore union RMT has called for a “crisis management” plan to rescue British jobs and infrastructure in the wake of the oil price slump.
It has “major concerns” about the impact of cost-cutting across the sector with workers from Total, Apache, Shell and others complaining that terms and conditions are to be cut and shift patterns altered.
Major redevelopment and refurbishment projects will be “delayed indefinitely as investment dries up”, the Health & Safety Executive “will be stretched to maximum capacity trying to deal with the introduction of the new EU Offshore Safety Directive”, the sustainability of production is “at risk”, and the UK taxpayer faces a bill of up to £30 billion for decommissioning, it said.
Norwegian Energy Company ASA (Noreco) said production at the Huntington field has been granted temporary approval to resume.
Earlier this week the company said production would be further delayed.
Work had been due to resume at the beginning of the month.
I read with real concern the comments yesterday that the UK offshore oil & gas industry was “close to collapse”.
These comments are over the top for an industry which thinks and plans long term, has significant momentum from current production and from major investments made over the last two or three years, and where the operators make their investment decisions based on the anticipated price of oil in two to three years’ time.
It’s important to have a balanced perspective at this time. The UKCS does face a very difficult year to 18 months which will see a slow down in investment, the loss of some offshore production, up to 10%, and the possible loss of around 15,000 jobs within an industry which employs 375,000, although this is difficult to estimate.
It will be a tough time for the industry and the people that work in it, but we are entering a downturn from which we will recover.
BP has selected Jacobs Engineering to hold its role as strategic supplier of mid-cap work on a global basis.
The contract value has not been disclosed, but it replaces a similar contract that has been in place since 2002.
There is no doubt these are worrying times for the North East of Scotland. Not just for those in the industry but also for the businesses and jobs that rely on what the oil industry does for the local economy.
But the North East of Scotland has seen many a storm before, and weathered them all. With the support of the new Oil and Gas Authority, and the UK Government – particularly the tax breaks which I have implemented at the Treasury – we can certainly weather this one, and even emerge stronger and more resilient.
That’s not to say that the fall in oil price to below $60 a barrel is not troubling. Oil and Gas UK’s figures suggest that only about 10% of projects are unprofitable at this level, but that’s still 10% of an industry that employs around 240,000 people across the supply chain. I know that a lot of people reading this today are genuinely worried about the future.
The US owner of Aberdeen firm International Tubular Services (ITS) says the business will not face criminal prosecution after its admission of bribery and corruption.
As revealed on Energy Voice yesterday, the Crown Office and Procurator Fiscal Service’s civil recovery unit recovered £172,200 under proceeds of crime legislation from ITS after it benefited from unlawful conduct.
ITS admitted it had benefited from corrupt payments made by a former Kazakhstan-based employee. The payments were made to secure extra contracts from a customer in the country.
A ruling that obesity can be classed as a disability will cause “confusion” and may open a “can of worms”, it was claimed yesterday.
Politicians and business chiefs were divided over the consequences of the European Court of Justice judgment on the case of 25-stone Danish child-minder Karsten Kaltoft.
Dame Anne Begg, Labour MP for Aberdeen South and chairwoman of Westminster’s work and pensions committee, said: “It’s difficult to tell what the impact will be.
Investors betting on a rebound in oil prices are nothing if not tenacious.
They have poured the most money in more than four years into exchange-traded products that track oil as prices fell 18% this month.
It’s the third consecutive month that the four biggest US funds have received money, during which time futures have plunged 41%.
North Sea oil production slumped by nearly 11% in the third quarter of 2014.
New figures showing the sharp drop in output coincide with growing fears about low oil prices and their impact on the future of the offshore industry.
One expert has warned the offshore sector is “close to collapse” because of the current low Brent oil prices, which yesterday rose slightly to about $62 per barrel.
Schlumberger has been awarded a drilling contract on the Mariner field by Statoil and its co-venturers.
The work will be delivered from the company’s Aberdeen base and it will be responsible for al number of services.
A total of 22 drilling and well services are included in the scope, including a logistics support responsibility.
The big economic development this year was one which no economic forecaster had predicted – a dramatic drop in the crude oil price. Brent crude has fallen around $50/barrel from the average price in 2011-13.
The most significant impact so far has been on Russia and the value of the rouble. The other very large oil producers in the world – Saudi Arabia and the United States – should be less heavily affected. The US is a net oil importer so consumers will gain more than producers lose. Saudi Arabia has very strong financial reserves to weather the storm.
Yesterday, the European Court of Justice issued its judgement in the case of Karsten Kaltoft, a 5ft 7in child minder from Denmark who, in his 15 years in that role, has never weighed less than 25 stone.
Mr Kaltoft's employment was terminated, and he felt that it was on the grounds of his obesity.
The European Court of Justice was asked to rule on two key questions: First, is it unlawful to discriminate against someone on the grounds that they are obese? Second, can obesity amount to a disability, which it is unlawful to discriminate against?
Oil and gas expert Alex Kemp said he did not agree with comments made which claimed the North Sea was “close to collapse”.
Robin Allan, chairman of the independent explorers association Brindex, said it is “almost impossible to make money” with the oil price below $60 a barrel.
However Mr Kemp said the current investment in new fields had been predicted to lessen when oil prices were at $90 a barrel.
This footage shows how onshore and offshore personnel will be able to train and exercise for oil spills.
The North Cape Maritime Training Centre in Honningsvåg in Norway now contains the world’s only oil spill simulator where onshore and offshore personnel isolated or together, can train in the tools and stages of oil spill combating operations.
It has been created by Aptomar together with Transas in close cooperation with the North Cape Maritime Training Centre in Honningsvag.
Oil and gas firms may have to charter boats or hire bigger helicopters to accommodate overweight workers after the European Court of Justice (ECJ) decided obese people can be classed as disabled.
Businesses are being warned to expect widespread and expensive consequences after law chiefs in Luxembourg ruled that being overweight qualifies as a disability.
The judgment follows the sacking of Karsten Kaltoft, a 25-stone childminder from Denmark.
US drivers are paying less than $2.50 a gallon at the pump for the first time in more than five years.
Retail gasoline averaged $2.477 a gallon yesterday, data from the Heathrow, Florida-based motoring group AAA showed.
That’s down from this year’s peak of $3.696 in April and the first time it has dipped below $2.50 since October 2009.
Wintershall has estimated a further 40million barrels of oil could be recovered from the Maria field in Norway.
The company said the planned recoverable resources will reach about 180 million barrels of oil in total.
Previous estimates had been around 140 million barrels.
It said the new assumptions are the result of extensive laboratory tests and studies as well as model calculations.
Canadian operator Enbridge shut down one of its pipelines after a leak at the Regina Terminal in Saskatchewan.
A release from the line within the on-site pumping station had been reported.
A spokesman said there was no impact to the public, wildlife or waterways following the incident.
The Russian economy must adapt to the reality of oil prices that could fall as low as $40 a barrel, President Vladimir Putin said as he faces the worst financial crisis since coming to power in 2000.
“I don’t know how quickly it will happen if prices stay at today’s level, or if they will drop lower than $60, $40,” Putin said today at his annual press conference in Moscow. “The economy will structure itself accordingly, however much is necessary.”
The US and Saudi Arabia, which with Russia are the world’s three biggest crude producers, may be colluding to push down the price of oil, Putin said.
Apache has cut its contractor rates by 10% according to reports.
The move comes just a day after WGPSN revealed it would be making 10% cuts to its contractor rates, as well as freezing salaries from January.
It follows a previous 10% cut for UK-based onshore contract workers in May.
Apache has appointed a new board member.
Peter Ragauss joins the company after eight years as senior vice president and chief financial officer of Baker Hughes.
Electricity generated from renewables in Scotland has matched that produced from fossil fuels for the first time.
Both sources accounted for 32% of total electricity generated in 2013, according to figures released by the UK Department of Energy and Climate Change.
Scotland continues to be a net exporter of electricity, exporting 28% of generation compared to 26% in 2012.
North Sea “close to collapse” says the man from Brindex. I am of course referring to remarks made to the BBC by its chairman Robin Allan, who then goes on to say that the UK’s offshore industry has been in such territory before.
The 1986 oil price crash was a shocking event and did terrible damage at the time. However, it also marked the start of a turning point as the North Sea gradually started to mature. Various initiatives in the 1990s designed to tackle key issues like rocketing costs helped and they were timely given the next slump that started with a gradual oil price slide in 1997, bottoming out in late 1998 at less than $10 a barrel for a few days.
