A summit which aims to bring together governments, trade unions and industry bodies to save jobs in Scotland’s oil capital has been announced.
Jenny Laing, leader of Aberdeen City Council, has called on the Scottish and UK Governments to attend the summit on the North Sea oil industry which is struggling under plummeting oil prices.
Labour has pledged to send its leader Jim Murphy and has urged First Minister Nicola Sturgeon and Prime Minister David Cameron to attend.
First Minister Nicola Sturgeon has been urged to reveal the Scottish Government’s assessment of the tax cut needed to save the jobs of thousands of oil workers.
Scottish Labour leader Jim Murphy said the move was necessary given the “crisis” currently unfolding in the sector due to the dramatic fall in the price of a barrel of oil, which is currently less than $60.
It comes as renowned economist Prof Ronald MacDonald, of Glasgow University, said a fall to below $40 a barrel was “not unreasonable”.
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.
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.
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.
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.
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?
Subsea 7 will be making changes to its organisational structure by switching to two global units.
The company said the move will be made to strengthen its capabilities and competiveness.
A Northern Hemisphere and Life of Field Business unit will comprise the UK and Canada region, Norway and the Gulf of Mexico.
The life of field and I-Tech division will be managed globally.
A north-east firm has been awarded a two-year contract extension for the provision of specialist contractors with Shell UK.
Aberdeen-based firm CSL has been awarded the extension of an existing onshore and offshore frame agreement with the oil giant across its Upstream International Europe region for the provision of client representation.
The contract covers provision of experienced senior client, diving, marine and engineering representatives to support subsea teams.
The European Court of Justice has ruled obesity can constitute a disability.
The EU’s highest court was asked to rule on the case of a male childminder in Denmark who said he was sacked for being too fat.
Legal experts had warned that the move would offer crucial protection to offshore workers who fall foul of new helicopter safety legislation limiting the size of people travelling to North Sea platforms.
The court said that if obesity could hinder “full and effective participation” at work then it could count as a disability.
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.
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.
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.
BLOBA Glasgow aluminium company owned by the former owner of Rangers Football Club said its systems had been successfully installed an accommodation module to be used on successfully installed on the BP Clair Ridge project.
Bellshill-based Alphastrut, owned by Sir David Murray’s private investment firm, said its decking has saved BP around 54 tonnes in weight following the completion the seven figure installation deal.
Well management firm Exceed has set its sights on international markets after reaching its target turnover of £15million this year.
The Aberdeen company is currently planning the first deepwater campaign in Myanmar, expected to commence in early 2015.
The firm has added 10 new staff in Aberdeen this year, adding to its workforce of 75 in Canada, Ghana, Kenya, Myanmar and Malaysia.
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.
ABIS Projects has won a number of contracts worth around £1million.
The oil and gas services consultancy said it has secured frame agreement and call-off contracts with companies including Talisman Sinopec and North Sea newcomer, MOL Group.
Francis Kiernan, who acquired an interest in ABIS Project earlier this year, spoke to Energy Voice about the contract wins.
With more than 30 years in the oil and gas industry, Mr Kiernan forecast opportunities for the UK in the Norwegian sector.
The onshore hydrocarbon producer, IGas, has encountered signs of shale gas at its Ellesmere Port exploration well in the North West of England.
The company spudded the well last month and reached total depth ahead of schedule two days ago.
IGas said the vertical exploration well encountered a thick section of the coal measure interval as well as a shale sequence, before penetrating the key Dinantian limestone geophysical marker.
Aker Solutions has secured a £120million contract for work on the Mariner oilfield development in the UK North Sea.
The agreement will see the company provide engineering, construction and commissioning services during the development’s hook-up phase.
Aker will carry out the work on behalf of Daewoo Shipbuilding and Marine Engineering on the development.
The deal comes in addition to a five-year maintenance and modification service contract awarded by Statoil in June.
