By Professor Alex Russell and Professor Peter Strachan
Over the past 3 months the share price of the Wood Group has fallen by 21.5%.
The recent announcement of the creation of a possible 150 new jobs on the back of winning a £500 million contract for BP may help stabilise this price slide.
But like all oil service companies their share price fate is dependent on the price of a barrel of oil. And the once powerful international oil industry appears to be impotent to influence prices one iota at present.
The UK Government must bring forward changes to the way the oil and gas industry is taxed by March or there will be “extremely serious repercussions“ for the sector, Energy Minister Fergus Ewing has warned.
Danny Alexander, the Chief Secretary to the Treasury, said earlier this month that UK ministers would consult on several new approaches to taxation.
The reforms would lower the tax burden on the industry, which has been hit by recent falls in crude oil prices.
The FTSE 100 Index held on to strong gains in the previous session today as a bullish start for Wall Street and an oil price bounce helped blue-chip shares recover from earlier turbulence.
A volatile session on Tuesday hit by jitters over the price of oil and the slide in value of the Russian rouble had seen the index close 2.5% ahead.
The latest session saw it earlier fall by nearly 100 points but recover to close 4.6 points up at 6336.5. Oil climbed back above the 60 US dollars mark for a barrel of Brent crude.
An advisory group has been established to help the Government address Scotland’s failure to equip young people for work.
Sir Ian Wood will be a founding member of the Scottish Government’s Developing the Young Workforce National Advisory Group.
The oil magnate chaired the Commission for Developing Scotland’s Young Workforce, which found Scotland is “simply not preparing or equipping young people for the world of work”.
Egypt has signed its first contract to extract gas by fracking in a deal with Shell and Apache which includes investments of up to $40million.
The oil ministry said it was part of efforts to boost output amid tumbling oil prices.
FMC Technologies has received an order from Star Deep Water Petroleum Limited to provide subsea equipment for operations in Nigerian waters.
The Agbami field is located 70 miles off the coast of the central Niger Delta region, at a water depth of approximately 4,800 feet.
EMGS (Electromagnetic Geoservices) has struck a data licensing agreement worth $7.1million for the provision of 3d EM date in the Barents Sea.
The data will be delivered this month which means the company will book the payment as a late sale in the fourth quarter of 2014.
An estimated 15,000 oil and gas workers in Iraq will be trained in how to deal with the potential hazards of hydrogen sulphide.
Oil giant Shell and Industry training standards body Opito have joined forced to ensure workers are protected.
The corrosive and hazardous gas, also known as 'sour gas', H2S occurs in the production of oil and gas fields which have a high content of it in their reservoirs.
Iraq said a collapse in oil prices and the cost of fighting Islamic State militants may force the country to review its plans to boost crude production this decade.
“It may be necessary to revisit our ambitious plans for the next five years,” Iraq’s Deputy Prime Minister Rowsch Shaways said at a conference in London, without specifying what measures the country might take.
“But we are committed to progress in this vital economic field with regard to production and export capacities.”
The DECC (Department for Energy and Climate Change) has made £2.5million cash pot available to encourage the development of CO2 storage in the North Sea.
The money will help companies to identify the next phase of sites under the sea to store C02 emissions from coal and gas power stations as well as heavy industry such as steel and cement factories.
The DECC will provide the cash from its Innovation Fund, and it will be delivered by the ETI (Energy Technologies Institute).
Offshore and onshore contract workers employed by Wood Group will have their rates cut by 10% on the back of lower oil prices.
The company said the move will be effective from January 2015.
Salaries will also be frozen for the majority of UK-based Wood Group onshore employees.
Subsea 7 has been awarded a contract by the Hess Corporation for installation work on the Stampede Project in the Gulf Of Mexico.
The deal includes work on flowlines, steel catenary risers, umbilicals, jumpers and associated subsea architecture which will tie-back two drill centres to a tension leg platform.
The company said production would be via two 10-inch flowlines from each drill centre.
An oil services firm has admitted making corrupt payments to secure contracts in Kazakhstan.
Aberdeen-based International Tubular Services (ITS) benefited from bribes made by a former employee to procure work from a customer in the oil-rich central Asian country, prosecutors said.
The corruption was uncovered when the engineering company was being sold last year and the Crown Office said today its civil recovery unit had seized £172,000 under proceeds of crime laws.
SeaBird Exploration has received an LOA (Letter of Agreement) for one of its vessels in the South East Asia region worth up to $4million.
The deal will see the vessel chartered for around 35 days starting in early April next year.
Bank of England governor Mark Carney said the fall in the oil price was a “net positive development” for the UK.
Presenting the Bank’s financial stability report in London, he said: “We should be clear that the 40%-plus drop will flow quickly through to consumers and increase real disposable income and is a net positive for the UK economy.”
But Mr Carney warned that the fall in the oil price also presented some risks to financial stability.
Atlantic Petroleum said it has reduced its capital expenditure for exploration next year by 75% on the back of lower oil prices.
The company has budgeted up to DKK 30million for its near-term exploration activities.
It expects operating expenditures of around DKK 175million for the full year 2015.
Chief executive, Ben Arabo, said: “We are adapting to the market situation and are cutting costs in 2015 where we can.
Technip has won a €100million contract to build an onshore terminal in India as part of the intergrated development of the Vashishta and S1 fields.
The award, from the ONGC (Oil and Natural Gas Corporation Limited), is one of the critical componenets in the development of the fields.
The contract will include basic design, detailed engineering, procurement and fabrication of the new onshore terminal facilities which will be integrated into the existing terminal.
Volatility for world markets continued today as the FTSE 100 Index put back a large chunk of the 2.5% rise seen in its previous session.
Oil prices steadied at 60 US dollars for a barrel of Brent crude but this was not enough to prevent another weak session in Europe as confidence was hit by the continued financial crisis in Russia.
The FTSE 100 Index stood 45 points lower at 6287.1, having rebounded by 2.5% or 149 points at the end of choppy trading yesterday.
The “big four” supermarkets are all cutting their fuel prices.
With world oil prices plunging, Asda, Sainsbury’s, Morrisons and Tesco are all reducing their petrol by 2p a litre and their diesel by 1p a litre from tomorrow.
The Asda cut means its customers will pay no more than 110.7p a litre for petrol, with the company’s diesel costing 117.7p a litre.
Nigeria’s two oil unions are set to meet with government officials for talks today as an indefinite strike aimed at curbing local fuel supply and exports entered a third day in Africa’s biggest crude producer.
The impact of the strike has been restricted to domestic fuel supply with oil lifting and export terminal operations unaffected at the moment, Francis Johnson, president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, said from Lagos, the commercial capital.
Union leaders will hold talks with the authorities today in Abuja, the capital, he said.
Norwegian investment firm HitecVision has consolidated five companies in its portfolio into one oil and gas services firm.
The firm’s Global Maritime Group, which has offices in Aberdeen, Glasgow and London, will now comprise Marine Contracting, Deep Sea Installation, Vryhof Anchor and Deep Sea Mooring.
The five companies specialise in offshore and maritime engineering, marine warranty, dynamic positioning, vessel inspection, mooring and anchors, as well as offloading, transportation and installation of offshore structures.
Prime Minister David Cameron has defended plans to give new tax breaks to North Sea oil and gas firms - describing the industry as "valuable and vital".
The UK Government announced a series of measures in this month's Autumn Statement to boost the offshore sector as it struggles to cope with falling prices and rising costs.
Mr Cameron, the Conservative leader, was questioned at yesterday's liaison committee about how the tax cuts squared with the government's environmental targets.
West Texas Intermediate oil rebounded after sliding below $55 for the first time in more than five years in New York trading.
WTI for January delivery gained 83 cents, or 1.5%, to $56.74 a barrel on the New York Mercantile Exchange.
Futures earlier touched $53.60, the lowest since May 2009.
The SeverEnergia joint venture involving Russian company Novatek and state-run Gazprom Neft has launched the second stage of the Urengoyskoye field.
It lies within the Samburgskiy area and includes the second train of the gas condensate de-ethanization unit.
Iran is said to be offering its main crude grade to customers in Asia at the deepest discount in 14 years, taking a cue from Saudi Arabia in trimming price differentials.
National Iranian Oil Co. cut its official selling price for January shipments of light crude to Asia to a discount of $1.80 a barrel below the regional benchmark as Middle Eastern producers vie to keep selling in the region, according to four people with knowledge of the decision.
An official at NIOC’s crude-marketing department in Tehran declined to comment.
