Tullow Oil is said to be preparing to announce job cuts by the end of the first quarter as oil prices continue to fall. It was reported that the company, which owns assets in the North Sea, is currently reviewing staffing levels. Details of the cuts could be presented to the market next month.
Cairn Energy has made reductions to its staff cutting 40% of its headcount in both full-time employees and contractors. The company made the announcement in a pre-close update in which it said its 2015 focus would be on an appraisal and exploration programme in Senegal. Cairn is currently still engaged in discussion with the Indian Tan department as it struggles to gain access to the value of its 10% share of Cairn Energy.
North Sea oil and gas company Ithaca Energy expects to spend nearly 60% less than last year as it moves towards production start-up from its Greater Stella Area (GSA) development during 2015. The Aberdeen-based firm expects Greater Stella, which is in the heart of the Central Graben area of the central UK North Sea, to come on-stream in the third quarter of this year. Ithaca said its reduced spending – it is budgeting for just over £99million this year, which it said was nearly 60% less than last year – reflected the advanced status of its GSA investment programme and lower output enhancement costs.
Energy minister Fergus Ewing will today accuse his UK counterpart of “mismanagement” of North Sea oil and demand urgent reform. Fergus Ewing is expected to meet UK energy minister Matt Hancock at a meeting of Pilot, an oil and gas taskforce which brings together government and industry representatives, in London. Speaking ahead of the meeting, Mr Ewing said: “The oil and gas industry is a strong success story for Scotland and will continue to be.
UK and Scottish ministers will hold crisis talks with oil and gas chiefs today amid alarm at falling prices. The spotlight will fall on the crunch meeting of the Pilot taskforce as Treasury chiefs face growing demands for government action to resuscitate the sector. Energy Secretary Ed Davey will chair the meeting before travelling to Aberdeen on Thursday to hold further talks with key industry figures.
Alex Salmond was quoted in Energy Voice's sister publication, the Press and Journal yesterday, as saying that “oil was too important to leave to Westminster”. Given that he based his projections for an independent Scotland on $110 a barrel and got it very, very wrong, I would agree with the majority of Scottish people that oil is far too important to leave to him. The continuing fall in the price of oil, while good for reducing pump prices and keeping costs down, is clearly a huge issue for the 375,000 people across the UK who work in the oil industry and related activities.
UK North Sea spending levels could slump to just over half their 2014 total over the next two years, with low oil prices alone costing the industry £2billion of lost investment, according to energy research company Wood Mackenzie. The warning in WoodMac’s latest annual UK upstream review comes after a continued “boom” in offshore investment in 2014. A total of £12billion was pumped into offshore projects last year, keeping the UK in the top 10 countries for upstream spending worldwide, WoodMac said.
Secessionist supporters will long remember 2014 as the year when Scotland came close to grabbing the mantle of freedom. Non-nationalists voters will see things differently as they salute the continuance of what they perceive to be the security blanket of being a member of the United Kingdom, despite having witnessed the unedifying spectacle of Clegg, Cameron and Milliband linking arms as they promised the earth for a ‘no’ vote. The Smith Commission’s devolution recommendations have already been dismissed by ‘yes’ voters as too little and frankly too focused on devolving administration rather than power. Membership of the SNP has soared as a consequence.
The chief executive of Oil & Gas UK said tax changes is needed urgently to counter falling oil prices and save investment and jobs. Malcolm Webb said as oil prices continue to fall, the risk to UK investment and jobs is mounting. His call to the UK Government was made just a few days after the Scottish Government's Energy Minister Fergus Ewing outlined a report which called for North Sea fiscal reforms.
The Scottish Secretary said a meeting between major figures from the oil and gas industry and the government will help secure the sector’s long-term future. Alistair Carmichael was speaking ahead of a PILOT meeting this week which helps facilitate the partnership between companies and the government. The Secretary of State said:“PILOT has been the vehicle for many of our great success stories in one of our most vital industries, from attracting global investment into Scotland through to preparing our future oil and gas workforce.
This image taken by an offshore worker shows the high waves caused by storms across Scotland. The photograph was captured from a rig of the coast of Shetland.
Former First Minister Alex Salmond has called for an agenda to be set out by Westminster in order to save jobs in the oil industry. Speaking to Energy Voice as his first exclusive column is published in its sister publication, The Press and Journal, the SNP politician called for action as oil prices head below the $50 mark. He said:"If you listen to Westminster politicians the debate is all about what prices are going to be and what revenues are going to be because they've never been concerned about anything else, but how much revenues they'll get from Scotland's resources.
Chancellor George Osborne has hinted that further tax breaks will be introduced to help the UK offshore industry amid growing pressure for urgent action to address tumbling oil prices. Mr Osborne will use his March Budget to unveil a tax “bailout”, it was reported yesterday.sun He is working on emergency measures to reverse a worrying decline in investment which threatens the future of the UK oil and gas sector, the report said.
Predicting oil price movements is as risky as exploring for oil itself. The average price for crude fell 10.3% from the start of 2014 to the date of the Scottish independence referendum on September 18. It fluctuated over this period – but few, if any, were predicting any major move in either direction in the months to follow. Yet during the past three months we have seen another 48.4% fall. Geopolitical factors involving OPEC, the US, Russia and Iran, as well as the economic decline of China and the Eurozone, have been touted as contributory causes.
This dramatic footage captured by an offshore worker in the North Sea shows waves crashing against the Borgholm Dolphin rig. Winds as high as 113mph hit Scotland earlier this week as a storms crossed the Atlantic.
Each financial crisis seems to throw up its own new words and phrases – back in 2007 it was the term “credit crunch” and then came the dreaded phrases “sub-prime” and “collateralised debt obligations” or CDOs during the 2008-9 crash. The subsequent foreign exchange trading scandals meant that suddenly everyone knew that “Libor” stood for the London inter-bank offered rate and that it had exotic-sounding cousins called “Hibor”, “Sibor” and even “Tibor”. Now the plunge in the price of oil has brought another seldom-used word back into the headlines – “contango”.
Britain’s trade deficit fell to a 17-month low in November - helped by cheaper oil - while the manufacturing sector grew at its strongest pace in seven months, official figures showed today. The shortfall between exports and imports narrowed to £1.4 billion from £2.2 billion the previous month, the smallest since June 2013. Manufacturing grew by 0.7%, reversing a contraction of the same size the previous month. It equalled the pace of growth in April and has not been better since last February.
The pitter-patter of tiny feet could have an unexpected impact on offshore operations, according to oil and gas employment expert Katie Williams. New laws which allow the sharing of parental leave following the birth of a baby could disrupt shift patterns and lead to staff shortages in specialist roles. Traditionally men would take a few weeks off work following a birth but the new rules, introduced in December, mean couples can now share up to 50 weeks leave for any child born on or after 5 April 2015.
The most read article on Energy Voice this week was the announcement that Talisman Sinopec Energy had terminated a contract with drilling company Archer. The Archer Emerald had been contracted out by the company in a two-year contract deal worth $96million and was scheduled to begin in the first quarter of 2016.
A well-known petroleum economist has warned that a spat over the creation of a new port in the Cromarty Firth risks giving the region a “bad image”. Tony Mackay, head of Mackay Consultants in Inverness, also criticised the Cromarty Firth Port Authority’s (CFPA) expansion plans, claiming that its estimates in terms of job creation and economic impact were “silly”.
Low oil prices could have a direct impact on the Scottish public purse when income tax is devolved, a think-tank has warned. Oil revenues remained reserved to Westminster in both the Scotland Act 2012 and the Smith Commission, but Scotland will receive 10p in the pound from next year with full income tax receipts promised in the next round of devolution. Fiscal Affairs Scotland said it is unclear whether oil prices will return to the average £70 a barrel seen in the last three years.
A North Sea oil summit called by Aberdeen City Council will be held within the "next few weeks". Council leader Jenny Laing, who announced the move in December last year, said politicians would meet with representatives from the industry to discuss North Sea investment.
Prime Minister David Cameron has pledged that the UK Government will do "everything we can" to help the North Sea oil and gas industry as prices continued to fall. The Conservative leader offered his support to the sector on the day prices dropped below $50 a barrel for the first time this decade. He also claimed that the industry’s troubles underlined the "utterly misguided" nature of the SNP’s independence plan.
North Sea oil is better off with the “broad shoulders” of the UK being able to stand behind it, the Prime Minister has said amid news of further falls in the cost of crude oil. David Cameron told MPs during Prime Minister’s Questions in the Commons that North Sea oil was a “vital” industry for the UK, adding “we should do everything we can to help it”.
Today, the price of Brent bland passed to the dark side, falling below $50 a barrel though it did cheer up a little later. Given the now colossal slide from $115 on June 19 and the determination of OPEC to stick to its decision made in November to defend market share, it is hard to know when and where bottom might be reached. Gradually, it is dawning that this won’t be a short-sharp nasty event.