MPs will today be given their first chance to debate the threat to North Sea jobs caused by the oil price collapse. Frank Doran, Labour member for Aberdeen North, secured the debate in Westminster amid concerns about the future of thousands of offshore workers. A UK Government minister will be required to attend the debate and respond to any points raised by MPs.
Shadow chancellor Ed Balls will join Scottish Labour leader Jim Murphy in Aberdeen today as the party launches a day of action on the “crisis” in the oil and gas sector. Mr Balls, who writes exclusively for Energy Voice's sister publication, the Press and Journal today, will meet industry representatives as pressure grows on the coalition to offer significant tax cuts in the Budget next month. Shadow Scottish secretary Margaret Curran will also lead the opposition response to a Commons debate on the North Sea, which has been called by Aberdeen MP Frank Doran.
The North Sea survived the oil price crash of the mid 1980s, which saw Brent sit at around half of its pre-86 level for over a decade. The oil industry is, by its very nature, cyclical. In the 80s the North Sea was at a very different stage in its life.
OEG Offshore said yesterday it had recruited chartered accountant Adrian Bannister from fellow Aberdeen firm Viking Seatech to become its new chief financial officer (CFO). Mr Bannister has been CFO at Viking, which carries out engineering services including mooring analysis and modelling for rig locations and moves, and recently diversified into broader asset-management work since 2012. He was previously CEO at both Stork Technical Services and Sparrows Offshore Group.
Union bosses have called for an end to what they branded "slash and burn" tactics in the oil and gas industry. They made the plea after offshore giant BP's announcement earlier this week 300 jobs would go. The price of Brent crude has dropped to a six-year low, fuelling fears of widespread redundancies.
Industry experts have given their perspective on what is happening in the sector, the price of oil, and the current challenges and opportunities there could be. It follows the announcement by a number of companies, including BP and Schlumberger, that job redundancies would be made across their global and North Sea operations. Graham Stewart, chief executive of Faroe Petroleum, said it would be the companies "with good growth prospect, strong balace sheets and good hedges in place who will ride this storm most effectively."
Sir Ian Wood insists the North Sea industry is not facing a doomsday scenario and can recover with the help of a big tax cut in the March Budget. The north-east oil and gas doyen said there was little point in swifter action from the Treasury as it would have no impact at current oil prices of about $50 a barrel. But a clear commitment by the chancellor to a “measured” reduction of at least 10% to the supplementary tax on profits in the Budget and more cuts to follow would encourage operators to keep project teams together and not give up on the North Sea, he said.
Chief Secretary to the Treasury Danny Alexander said the UK Government will take the time until the Budget announcement on March 18 to get the right measures in place to support the North Sea. His comments were made after Sir Ian Wood called for major tax cuts to help the oil and gas industry. Mr Alexander said he had discussed the issue directly "on many occassion" and the government had already made some "significant changes".
North Sea oil expert Sir Ian Wood, who led a review of the industry for the Government which reported last year, said a major tax cut was necessary to give producers the confidence to keep their operations going. He said the supplementary charge on profits should be cut from 30% to 20% although he acknowledged that would have little impact in the short-term because prices were so low.
The chief executive of Oil & Gas UK said "urgent action" was needed following BP's announcement 300 jobs would be cut from its North Sea operations. Malcolm Webb said the rapidly falling oil price had led to companies making difficult decisions in a challenging environment. BP said it would be making 200 redundancies to its office-based staff in Aberdeen while a further 100 contractor jobs will be cut.
The Secretary of State for Energy and Climate Change has asked the new chief executive of the Oil and Gas Authority (OGA) to lead an urgent commission to identify key risks to oil and gas production in the UKCS. Ed Davey said he had asked Andy Samuel to look at what further measures could be taken to help mitigate the impact of low oil prices and high production costs affecting the industry. The minister made the announcement on a vist to Aberdeen on the same day BP revealed it would be cutting 200 jobs from its North Sea operations and axing 100 contractor roles.
The Chancellor showed “considerable foresight” in cutting taxes on North Sea oil ahead of the plunge in commodity prices, William Hague has said. The Commons leader said the dramatic falls in oil prices were good for the economy overall but added the Government took seriously the hit on employment in the sector. BP has announced 300 job losses in Aberdeen where much of its North Sea oil business is based.
The future of the North Sea oil industry has dominated clashes at Holyrood, with the First Minister urging opposition leaders to give their support to SNP proposals to help the industry in the wake of falling prices. Labour, the Conservatives and the Liberal Democrats all pressed Nicola Sturgeon on the impact that prices, which have now dropped below 50 US dollars (£32) a barrel, would have on both the industry and the country. Ms Sturgeon called for an end to “petty political point-scoring” at the same time as she criticised Labour MPs for backing Tory plans for a further round of austerity cuts in a vote at Westminster earlier this week.
The North Sea needs continued investment from businesses and government through its current period of transition, according to a new report from Deloitte. The business advisory firm has just released its latest Petroleum Services Group’s North West Europe Review which details drilling, licensing and deal activity across the region for the whole of 2014. The report found 40 wells were drilled offshore UK throughout the year, a decrease on the 50 wells reported in 2013.
The employment threat from the plunging oil price has produced the “the most serious jobs situation Scotland has faced in living memory” with urgent changes to the tax regime required, Holyrood’s Energy Minister said. Fergus Ewing demanded action from the UK Government as Energy Secretary Ed Davey was visiting Aberdeen to talk to leading figures in the North Sea oil and gas sector. With Chancellor George Osborne due to unveil his final budget before the election in March, Mr Davey suggested “we may well be able to have extra help for the North Sea”.
Oil major Total has started gas and condensate production from the West Franklin Phase 2 project in the North Sea. The company said the project, in the Central Graben area, will supply 40,000 barrels of oil equivalent per day to the Elgin/Franklin hub. The project includes the drilling of three new production wells and the installation of two new platforms, the West Franklin wellhead platform and the Elgin B platform which will also be used to drill new wells on Elgin.
Oil major BP will cut 300 jobs, the company has announced. The move comes after the oil major launched a blitz on costs in November influenced by rising costs and "toughening market conditions". BP said the cuts would consist of 200 full-time employees and 100 contractors.
Plans for a billion-dollar cash injection in the North Sea will be unveiled today by Prime Minister David Cameron and US President Barack Obama. The Carlyle Group, one of the world’s leading investment managers, is putting £660million into the offshore oil and gas industry. The deal has been hailed as a “clear vote of confidence” in the sector amid fears about the effect of tumbling world oil prices on north-east jobs.
Energy Secretary Ed Davey has promised that Westminster will "stand by" the oil and gas industry amid fresh hope that ministers plan to take "extraordinary" action. Speaking exclusively to the Press and Journal, Energy Voice's sister publication, on the eve of a trip to Aberdeen today, the Cabinet member reassured offshore workers that they have a "great future". Mr Davey and Scottish Secretary Alistair Carmichael will meet sector leaders in the Granite City amid growing alarm at plummeting world oil prices.
The First Minister spoke to Energy Voice on her first to Aberdeen since becoming leader of the SNP party. To help the industry, the Scottish Government is setting up an energy jobs taskforce. Nicola Sturgeon said that the “recent drop in the price of a barrel of crude oil” as well as the UK Government’s “mismanagement” of the tax regime for oil and gas could “pose a threat to a number of jobs”.
Nicola Sturgeon has accepted Aberdeen City Council’s invitation to an emergency oil summit. The first minister revealed she was ready to take part as she prepared to visit the city today as part of efforts to help the oil industry with plummeting prices.
The collapse of the oil price has created losers and winners, and like every major movement in a commodity sector, the trick for investors is figuring out which side of the trade to be on. The most obvious victim of the slide in Brent and WTI prices over the last six months has been the major oil producers. Holders of these equities have seen price slides up to 33%. The question for oil company investors now is how to determine which of these companies are prepared to weather a sustained period of oil prices around $50 a barrel, or worse.
UK and Scottish ministers have pledged to put their differences aside and “pull together" to help save North Sea oil and gas jobs. Representatives from the administrations at Westminster and Holyrood held crunch talks with key figures from the offshore sector in London yesterday. The governments were told at the summit of the urgent need to tackle the crisis caused by plummeting world prices.
North Sea oil firm Canadian Natural Resources (CNR) slashed its spending plan for 2015 yesterday as the price of crude continued to fall. Calgary-based CNR, whose operations also cover North America and Africa, said it was cutting its budget for this year by £1.6billion to £4billion. It cited the plunging oil prices as the reason, but other factors are also dictating how much the firm spends and where.
Oil giant Total has posted images of huge waves hitting one of its production platforms in the North Sea. The French company captured the photographs from the K6CC platform in waters off the Netherlands. Although it is permanently manned, work is normally only performed on the facility during the day.