Oil major BP has postponed construction of its £500million gas sweetening plant for up to five months. The company said the decision was triggered by the low oil price over the past six months. Earlier this year the company announced job losses from its North Sea operations as it looks to streamline its operations.
The President of Mexico said his country was keen to learn from the expertise of the North Sea oil and gas industry on a trip to Aberdeen yesterday. A heavy police presence, a civic reception and some of the country’s top politicians greeted Enrique Pena Nieto in what was his only commitment outwith London during his stay in the UK. In the grand surroundings of the Town and County Room in the town house, President Nieto signed memorandums of understanding with the UK Government to forge closer links on energy and climate change. Lord Provost George Adam and Secretary of State for Scotland Alistair Carmichael welcomed the Mexican delegation to the north-east, while UK energy minister Matt Hancock described it as the dawn of “an era of closer collaboration”. President Nieto said his country had “enormous” reserves of oil and gas, but was “not capable of exploiting them”.
Tullow Oil Plc, Total SA and Cnooc Ltd. are set to invest almost $14 billion developing oil fields in Uganda, according to Jimmy Mugerwa, general manager of Tullow’s operations there. “With the partner companies, we are looking at $8 to $10 billion for the upstream and $3 to $4 billion when we start the pipeline construction,” Mugerwa said in an interview Thursday in Kigali, the capital of neighboring Rwanda.
This week's most popular story was the assertion from oil and gas expert Alan Kennedy, of professional services firm KPMG, that the current downturn in the industry won't trigger an industry apocalypse for the north-east.
Oil fell in New York after US crude supplies increased to the highest level in more than three decades, adding to a global glut. West Texas Intermediate for April delivery dropped 63 cents, or 1.2%, to $50.90 a barrel at 9:09 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 43 percent above the 100-day average for the time of day.
UK production efficiency has dropped from 80% to 60% over the last decade making technologies that can help extend the life of current assets and rejuvenate uptime increasingly important. Gerald Schotman, Chief Technology Officer at Shell put it wisely: “If you simply stick with existing technologies then our industry becomes very labour intensive and unaffordable.” Yes there is a risk involved, but we take an even bigger risk of failure if we do not, as an industry, fund innovations that can address production challenges and support recovery.
The President of Mexico Enrique Peña Nieto arrived in Aberdeen today during a UK state visit to mark closer ties on energy issues and climate change. President Nieto was greeted in Aberdeen by Alistair Carmichael, the Secretary of State for Scotland, and escorted to the Aberdeen Town House. He was joined by energy minister Matthew Hancock and introduced to senior UK oil and gas representatives, including Shell and BP.
Months of hard science by budding young students at an Aberdeen school came to an end yesterday when they presented their projects at TechFest last week. TechFest's Heroes of Tomorrow event, sponsored by Statoil, had pupils from S1 to S6 giving short presentations to their families and peers on science, technology, engineering and mathematics (STEM).
Maersk have launched a new training facility in Kingswells, providing additional training opportunities to oil and gas workers in Aberdeen. Launched this week, the centre aims to complement the training facilities that already exist in the north-east, including the survival centre in Portlethen and the boat training facility in Stonehaven.
OEM Diesel Products has invested a six figure sum in a base in Australia to meet market demand. The Aberdeen-based firm opened the office in St George’s Terrace in Perth, Australia. In Aberdeen, the company recently moved to its new base at the Commerce Centre at Souterhead Road, Altens. The building, which spans more than 6000 sq ft includes a workshop, reception area, additional offices and boardroom.
Woodside Petroleum’s proposed $3.75billion acquisition of Apache’s interest in three projects will not be opposed by the Australian Competition and Consumer Commission (ACCC). The company is looking to acquire interests in the Wheatstone, Balnaves and Kitimat Projects. The first and second project are located in the Northern Carnarvon Basin, offshore Western Australia, while the Kitimat Project is located in British Columbia, Canada.
Royal Dutch Shell Plc and the United Steelworkers’ union will resume talks Monday on a new labor contract after ending discussions today without a resolution to the largest oil worker strike since 1980. The two sides will meet in Houston, the union said in a statement. The discussions come amid a walkout that’s widened to 12 refineries accounting for almost 20 percent of the capacity in the US Shell is leading the negotiations with the 30,000-strong United Steelworkers on behalf of companies including Exxon Mobil Corp. and Chevron Corp.
Energy Secretary Ed Davey has given Russian oligarch Mikhail Fridman seven days to explain why he should be allowed to retain ownership of newly acquired oil and gas fields in the North Sea, or face being forced to sell them. Upping the ante in a standoff that could deter other Russians from investing in Britain, Mr Davey wrote to Mr Fridman saying he was considering forcing him to sell North Sea assets just acquired from German utility RWE. RWE finalised the sale of oil and gas production unit RWE Dea to Mr Fridman's investment vehicle, LetterOne, earlier this week, ending months of uncertainty over whether the £3.7billion deal would go ahead.
Subsea 7 refused to say yesterday if more jobs will go across its global operations after it revealed 1,000 were shed in 2014. The energy service giant also outlined plans to reduce its fleet capability by 10 vessels over a two-year period as it continues to look for ways to slash costs in the wake of the big drop in oil prices. Hefty losses for the firm in 2014 – more than £150million at pre-tax level – were the latest blow for company balance sheets right across the sector as it adjusts to a new trading climate. Subsea 7 said its latest figures were hit by a £774.4million writedown due to an expected downturn in activity, and without it net profits came in at £525.4million.
Spin is beating science in the debate over unconventional oil and gas in Scotland, according to the boss of a leading engineering firm. Keith Cochrane, chief executive of Weir Group, said he fears the country will be left behind if it does not take advantage of shale gas opportunities. The Scottish Government has announced a moratorium on granting planning consents for hydraulic fracturing or “fracking” - the method by which the gas is extracted. It will be in place while a full public consultation is carried out alongside further research into the technique to look at planning, environmental regulation and the impact on public health.
David Cameron and the President of Mexico have discussed the prospects for co-operation on energy as part of Europe’s efforts to diversify the sources of its fuel supplies away from Russia during the ongoing stand-off over Ukraine. The discussion came as the Prime Minister hosted Enrique Pena Nieto for lunch at 10 Downing Street on the second day of his state visit to the UK. The Mexican leader will visit Aberdeen for talks with senior representatives of the UK oil and gas sector tomorrow, when he is expected to sign a memorandum of understanding on future collaboration. Mr Cameron’s official spokesman told reporters the two men had “talked about how the EU and Mexico can continue to co-operate on energy matters, including as part of the EU’s strategy to increase diversification away from Russian energy sources”.
Rosneft said its net profit for 2014 was $5.7billion – a 10% decrease year-on-year – caused by current economic conditions. Russia’s top oil producer said its earnings before EBITDA were up 11.6% from the year before to 1.06trillion rubles.
The oil and gas industry, in common with other highly complex sectors such as aerospace, defence and nuclear, has traditionally experienced long development times and high up-front costs. Despite the current economic challenges faced by the industry, a significant hydrocarbon prize remains up for grabs. The associated drive for efficiencies should be used as a catalyst to examine and implement approaches which may bring technology into operation as early as possible, optimise decision making, or generate efficiencies in other areas. Identifying common needs that present barriers to development and offer opportunities for collaborative working is a start.
Independent oil producer EnQuest has become the latest firm to cut its contractor rates in the wake of the fall in oil prices.
Saudi Arabia, the world’s biggest crude exporter, pledged to supply as much oil as its customers need and doesn’t anticipate any weakening in that demand. The country won’t cut output unless customers refuse to buy its crude, Oil Minister Ali Al-Naimi said in Berlin on Wednesday. That’s unlikely to happen because it is the world’s most reliable supplier, he said.
Energy service firm Petrofac plans to axe 16.5 full-time equivalent offshore roles supporting the UK North Sea operations of CNR International (CNRI). A spokeswoman confirmed the fewer-than-expected number last night after 37 possible redundancies was mentioned in a letter to Petrofac employees. It also said workers supplied to CNRI through its Aberdeen-based recruitment business, Atlantic Resourcing, were being “downmanned”.
A leading politician has intervened in an effort to prevent the European Commission from limiting emissions from the UK's oil and gas industry. The commission has proposed the medium-sized combustion plant directive, which would limit the emissions produced by medium-sized engines and generators - integral to every offshore oil platform.
Millions of pounds of funding is available to support innovations which offer cleaner, low-cost and more efficient conventional fuels. Innovate UK is offering £6million to new technologies that increase efficiency, reduce the cost and minimise the environmental impact of coal, natural gas and oil.
David Glen, head of tax at PricewaterhouseCoopers (PwC) in Scotland, said there is a “real danger” plunging oil prices could result in investment becoming uneconomic, leading to diminishing field life and speeding up decommissioning. The latest economic report from the University of Strathclyde’s Fraser of Allander Institute, sponsored by PwC, joins calls for the Chancellor to take action in the Budget later this month. David Glen, head of tax at PricewaterhouseCoopers (PwC) in Scotland, said there is a “real danger” plunging oil prices could result in investment becoming uneconomic, leading to diminishing field life and speeding up decommissioning. The latest economic report from the University of Strathclyde’s Fraser of Allander Institute, sponsored by PwC, joins calls for the Chancellor to take action in the Budget later this month.
California regulators ordered oil drillers including Chevron Corp and Linn Energy LLC to halt operations at 12 injection wells in the state because of concerns they may taint groundwater. The Division of Oil, Gas and Geothermal Resources said 10 of the well operators shut down voluntarily, while two were issued cease-and-desist orders. All the wells are located in Kern County, northeast of Los Angeles, are within a mile of the surface and 500 vertical feet underground of a water supply, the agency said. There is no evidence that drinking water has been contaminated, the agency said.