Oil and Gas UK chief executive Malcolm Webb said his meeting with Scottish Labour leader Jim Murphy was "very positive". The MP has been on a visit to Aberdeen to meet North Sea industry leaders, offshore trade unions and city councillors amid a continued fall in the global price of oil. Mr Webb attended a meeting alongside the politician to discuss the current challenges facing the oil and gas industry.
Scottish Labour leader Jim Murphy today called on the SNP government to establish a "resilience fund" to support crucial industries in times of crisis. Mr Murphy was speaking during a visit to Aberdeen to meet North Sea industry leaders, offshore trade unions and city councillors amid a continued fall in the global price of oil. The Labour MP expressed concern about the "human impact" of redundancies in the energy sector and the wider impact of a downturn on the local economy.
The industry is going through what oil workers have described as a crisis period. At the time of writing, the oil price has fallen below $54. That's less than half the price predicted by the SNP in their White Paper, which formed the economic basis for their independence case. But more immediate than the politics is the fact the plummeting oil price has resulted in a number of firms cutting the wages of their staff.
The speed with which the North Sea’s prospects have become engulfed in crisis and doom-laden predictions has taken the world, and not just our own small corner of it, by surprise.
On December 2, Chevron announced that oil and gas production had started at the Jack/St Malo project in the Lower Tertiary trend, deepwater US Gulf of Mexico. Jack and St Malo are among the largest fields in the US Gulf and were discovered in 2004 and 2003. They are located in Walker Ridge blocks 758, 759, and 678 in more than 2,100m of water, some 435km south-west of New Orleans. Drilled to a total depth of 8,839m (29,000ft), the Jack-1 exploration well encountered more than 350 feet (107 metres) of net oil sands pay in a Lower Tertiary Trend.
The chief executive of the newly formed Oil and Gas Authority (OGA) has taken up his new role. Andy Samuel was appointed in November last year following the establishment of the independent body. Its creation was an integral part of the recommendations made by Sir Ian Wood as part of a review into maximising the UK’s offshore oil and gas resources.
Total has confirmed the start-up of oil production from one of its North Sea projects. The Eldesk II project on the PL 018 license of the Norwegian North Sea is producing oil in line with its schedule that was approved in 2011. The company said the venture increase oil recovery of the Eldsk field and has a production capacity of 70,000 barrels of oil inequivalent per day.
At the outset, let me make the following clear: First, the UK offshore oil and gas industry faces some very serious challenges but it is NOT in danger of being wiped out. While the industry is certainly not enjoying the best of health right now, it can and will recover. Second, the troubles we face are not all down to the recent fall in the price of oil, that is a serious complication but it is not the root cause. Third, while I am certain that these problems can and will be overcome, the cure, if it is to be effective and lasting, requires urgent, positive and collaborative action by all stakeholders across Industry and Government over the coming weeks, months and years.
Oil prices have crashed and the North Sea is hurting badly, with the likelihood that this is going to be a prolonged downturn . . . at least for the bulk of this new year, if not longer. Capital investment in the North Sea could halve by 2017 unless there is urgent reform of the tax regime in light of a big drop in the price of crude oil, according to Oil & Gas UK, which is hoping for good things from the Treasury before the May election following promises made early last month. And Wood Mackenzie has estimated that 32 potential European oil field developments worth more than $85billion (£55billion) are waiting for approval and could be at risk if oil prices continue to slump. A high proportion of those projects have a break-even price higher than $60 per barrel and many are in the UK sector.
A North Sea helicopter was forced to return to an airport after it was struck by lightning on its way to an oil platform, it has emerged. The Bond-operated EC225 was carrying 11 passengers and two crew at the time off the incident, off the coast of Aberdeen. The helicopter has now been taken out of service until it is examined by engineers to see if the aircraft was damaged during the lightning strike.
The Press and Journal’s Jeremy Cresswell gives a sneak peek of what to expect in January’s edition of Energy. Some of the highlights include an interview with Oil and Gas UK’s Malcolm Webb and Opito’s group chief executive, David Doig. Watch the short clip of what to expect below.
Seismic acquisition technology firm Magseis has won a contract with Chevron North Sea. The contract is for seabed seismic acquisition using the company’s MASS system and Artemis Athene.
In the final part of our 2014 round-up we take a look at the final few months of the year. In September, Professor Alex Kemp from the University of Aberdeen, predicted 99 new North Sea oil discoveries over the next 30 years. Mr Kemp used detailed financial modelling to set out “commercially viable” projects for the industry following the Wood Review.
The 6405/12-1 on PL584 was investigating the hydrocarbon potential of the Lindarormen prospect which is 150km northwest of Kristiansund. The company said no reservoir sandstones were encountered in the primary objective.
A full-scale terrorist hijacking of a North Sea platform was simulated by the UK authorities in the 1980s – and code-named the “Smoked Salmon” exercises. Declassified files have revealed that the offshore counter-terror mission was run from November 25 to 28 in 1985. Royal Marines and members of all the armed services were involved in the exercise, as well as the intelligence agencies.
The UK Government abandoned plans to invest extra cash in North Sea safety two years before the Piper Alpha disaster – because it was not deemed a priority. Newly-released files show that Margaret Thatcher’s energy secretary highlighted the need to spend more on the sector in 1986. But Peter Walker, the minister at the time, said he had decided against asking the Treasury for any additional money after having “carefully reviewed my priorities”.
In the second part of our gallery series, we take a look at some of the defining moments in the months leading up to the Scottish independence referendum. In May WGPSN said it would be cutting contractor rates by 10%.
The oil and gas industry could be set for a year of mergers and acquisitions following a rapid fall in prices, it has been forecast. Business consultants PricewaterhouseCoopers (PwC) said 2015 might even see the first “hostile takeover” in the sector in living memory. The oil price has fallen from 115 US dollars (£73) a barrel in the middle of this year to around 60 dollars (£38). Teams working at PwC set out their top five predictions for the year ahead against such a backdrop.
Professional services firm PwC said the oil and gas industry will need to adapt to the new level of volatility within the sector. The company’s oil and gas team said there was little expectation of a rapid rebound in oil prices, which have dropped by 46% in the past six months. From more than $100 a barrel, the price of Brent Crude has dropped to around $60. PwC have made five predictions for the years ahead in the wake of the industry’s current climate.
As 2014 draws to a dramatic close for the industry, Energy Voice reflects on milestone events that fuelled a hectic year. In the first of a three part series we look back at some of the game changers within the industry. Later this week, we'll look at some of the highlights and defining moments in the months leading up to the Scottish referendum.
Fears have been raised that an emergency summit on North Sea oil will “fall flat on its face”. Aberdeen City Council Conservative group leader Ross Thomson yesterday voiced his “extreme disappointment” at the way Labour announced the event, with no details on its remit or venue. He has e-mailed other group leaders on the council calling for an a commitment to constructive talks.
Having reached 2014 highs in June, crude oil prices started to free fall and in the search for reasons some people have pointed towards the International Energy Agency's (IEA) changing demand and supply expectations. Since June, when its 2014 global oil demand growth forecast hit a peak of 1.4million barrels per day (bpd), IEA’s projections have fallen by half. By contrast, supply expectations have been much more stable – since June, the IEA's forecasts of non-Opec (Organisation of the Petroleum Exporting Countries) oil supply growth have expanded by a modest 300,000bpd and the IEA's non-Opec supply forecast is currently only 100,000bpd above the level at which it started 2014.
Once the details of the summit are announced, Aberdeenshire Council will make sure it is fully involved. The oil and gas industry is incredibly important, not only to the North East economy, but to the economy of Scotland and the rest of the UK. We have established good working relationships with the private sector over many years and understand the challenges facing the energy industry today. The area benefits when oil prices are high, but this also brings challenges impacting on house prices and affecting the local recruitment market. It’s important that we consider the impact of falling oil prices, the likely effect on the economy and steps we can collectively take to support the industry.
Ithaca Energy has appointed a new chief operations officer. Roy Buchan will take up his new role in January and his appointment follows the announcement John Woods will step down from his role as chief development officer. Mr Buchan has more than 30 years’ experience in the oil and gas industry and has held many technical and senior management positions in the North Sea for Shell and BG Group.
The offshore union RMT welcomes the announcement of a North Sea oil summit by Aberdeen City Council. As a representative industry body there are a number of areas we feel need to be addressed in the current climate: People - RMT has major concerns about the impact of cost-cutting across the sector. We are hearing from workers with several different operators (Total, Apache, Shell and others) that terms and conditions are to be slashed in an effort to reduce costs. The most worrying element of these cuts are the proposed changes to working patterns which could see workers currently working 2-weeks on, 3-weeks off, being altered to either two-on, two-off or three-on, three-off. These changes if pushed through will see significant redundancies and a loss of experience and 'corporate memory'.