Offshore oil workers need to take a “reality check” and understand that current shifts which amount to working 20 weeks a year are no longer sustainable, according to one of the North Sea’s biggest employers. Unions have complained that changes in shift patterns from the current two weeks offshore followed by three weeks of leave to three on, three off will lead to longer hours and compromise safety. But Dave Stewart, managing director of Wood Group UK which employs 12,000 workers including 5,000 offshore, said the industry has been working “too inefficiently for too long”.
Oil & Gas
The UK should continue to look for onshore unconventional gas supplies to meet the country’s future energy demand, according to an oil and gas industry body. Fossil fuels account for around two-thirds of the UK’s energy consumption, particularly in homes and transport, and domestic production must continue to avoid future reliance on costly imports, according to Oil & Gas UK. The boom in unconventional gas released through “fracking” in the US has driven down oil prices and plunged the UK North Sea oil sector into crisis, prompting city leaders in Aberdeen to hold an emergency summit of politicians, industry representatives and unions today.
Politicians were today warned that the oil and gas industry was heading for a “cliff edge” in terms of investment. Oil and Gas UK chief executive Malcolm Webb told delegates at a summit in Aberdeen that the sector was “in a bad place” and required urgent action on a number of different levels. He also told the UK Government that the Budget next month must deliver tax cuts in the region of 30-40%. Mr Webb said: “It is vitally important that we don’t delude ourselves into thinking that the real problem is the price fall. The industry is currently heading towards a cliff edge in investment.” Mr Webb added: “I beg politicians not to make a political game of it. “The upcoming Budget presents a final chance to get this right. Half measures will not do and there will not be a second chance.”
EnQuest said it has exited from its small investment in Tunisia. The company agreed last year to acquire interests in the Didon producing oil field and the Zarat permit from PA Resources AB and its subsidiaries (PAR). PAR was to retain a partial interest in the assets following Enquest's acquisition.
Politicians need to work together to help the North Sea oil industry through a "very challenging time", Scotland's First Minister has said.
Want to buy an oil well in UK’s North Sea? There are plenty available as some of the industry’s largest names try to sell aging, costly wells that have become even less profitable with the plunge in crude prices. BG Group Plc, Apache Corp. and Marathon Oil Corp. are among companies that have explored a sale of their North Sea assets, according to people familiar with the processes. In all, assets worth as much as $30 billion are currently for sale in the North Sea, said Dave Blackwood, senior adviser to investment bank Evercore Partners Inc.
Aberdeen’s council leader will today call for the UK and Scottish governments to “seize the moment” and back plans for a £2billion investment in the north-east. Jenny Laing will use a North Sea oil summit to argue for a radical transformation of the area through spending on transport, housing and skills development to help secure the long-term future of the industry. The city council administration believes the level of attention currently focused on the energy sector, due to the dramatic fall in the price of Brent Crude, provides a “historic opportunity” for the region.
New figures have shown that optimism among oil and gas companies fell dramatically at the end of last year in a continuation of a downward trend in the sector. Industry body Oil and Gas UK’s business sentiment index, which is published today, has shown a drop of 16 points to -23 on a -50/+50 scale. The overall index has slumped further into negative territory for the second quarter in a row amid a plunging oil price and lay-offs at several North Sea firms.
Dubai stocks advanced the most in six weeks after oil rallied on signs a price slump will curb output. Saudi Arabia’s benchmark index rose after King Salman ordered bonuses of two months’ salary to be paid to government workers. The DFM General Index added 4.5%, the most since December 21, to close at 3,840.22. Abu Dhabi’s ADX General Index climbed 2.2%, its first increase in five days, and Qatar’s QE Index gained 1.4%, the strongest close since January 8.
There are too few women entering, staying in and reaching the highest levels of the energy industry, a new report says. Professional services firm PwC and industry body POWERful Women (PfW) reveal research findings showing just 5% of executive boards seats among the top 100 UK-headquartered energy firms are held by women. More than three in five of the firms (61%) have no women on their boards at all.
The United Steelworkers union, which represents employees at more than 200 US oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980. The USW started the work stoppage after failing to reach agreement on a labor contract that expired Sunday, saying in a statement that it “had no choice.” The union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies including Exxon Mobil Corp. and Chevron Corp. since negotiations began on January 21.
Chevron Corp is slowing spending on the Kitimat liquefied natural gas project on Canada’s Pacific Coast amid a crash in oil prices and competition from new projects worldwide. The San Ramon, California-based producer is also delaying all final investment decisions except for its Tengiz field in Kazakhstan, Chief Executive Officer John Watson said on a conference call on Friday. He did not elaborate on the slowing of investment in Canada.
OAO Rosneft, the state-controlled giant built by Vladimir Putin’s long-time associate, Igor Sechin, can’t be sure of being the country’s most valuable oil company anymore. OAO Lukoil, run by billionaire executives Vagit Alekperov and Leonid Fedun, had a bigger market value yesterday for the first time since 2006. Although Rosneft has now edged back ahead -- $34.5 billion versus $33.7 billion -- the near parity is striking given Rosneft produces more than twice as much oil and gas.
A group of MPs has claimed that the North Sea industry is using the oil price slump as an “opportunity” to cancel projects, sack workers and shelve maintenance work. A motion has been tabled at Westminster and signed by 16 MPs saying that they are “dismayed” by the actions of some employers since the price plummeted. Industry body Oil and Gas UK has written to Alex Cunningham, the Labour member for Stockton North who lodged the motion, to deny that the sector is taking “short-term responses”.
Drilling company Archer is in consultation with its staff about redundancies on a number of its North Sea operations. The move will affect offshore employees on the Shell Brent Alpha, Bravo and Delta as well as staff known as the “roving crew” according to documents seen by Energy Voice. In a letter to staff, Archer said the redundancies had been caused by the oil major Shell’s announcement it would be ceasing operations on its Brent Delta Rig.
Atlantic Petroleum has announced it will relocate its finance function to Bergen and close its Torshavn in Norway. The company said its current chief financial officer, Mourits Joensen, will leave the company with immediate effect. Nigel Thorpe, currently business development director, will become interim chief financial officer.
SBM Offshore has reintroduced its chief operating officer position with the appointment of a former Technip president. Philippe Barril has also been appointed as a member of the company’s management board. Mr Barril served in a number of different roles with Technip including as executive vice president and as chief operating officer of both onshore and offshore.
Electromagnetic Geoservices ASA (EMGS) has entered into a data licensing agreement with an oil company for the provision of 3D EM data worth $2.5million. The agreement is related to the 23rd licensing round in the Barents Sea.
A moratorium on new leases for oil and gas developments in parks and forests has been reinstated in Pennsylvania. Governor Tom Wolf said the moratorium was about “striking the right balance” between development and environment. The executive order move was made after Pennsylvania’s Department of Conservation and Natural Resources (DCNR) has concluded that additional leasing could jeopardise the ability to maintain gold-standard forest certification.
UK Oil and Gas (UKOG) has signed an alliance and consulting services agreement with US-based NUTECH Energy Alliance. The companies will work together to maximise the potential value of the Horse Hill area licences in England. NUTECH have previously analysed thousands of wells for oil majors in around 80 countries and last year completed a detailed analysis of the conventional potential of 381 UK onshore wells.
Canada’s National Energy Board (NEB) has approved an application by Woodside Energy for a 25 year natural gas export licence. The export point would be in British Columbia and it would have a licence with a maximum term quantity of 807billion cubic metres.
Economic growth in Nigeria, Africa’s biggest crude producer, is projected to slow to 5.5% this year after oil prices plunged, the statistics office said. Gross domestic product growth is set to decelerate from an estimated 6.2% last year, the National Bureau of Statistics said in a report on its website. The economy is forecast to expand 5.8% in 2016 and 5.8% in 2017.
A huge investment by Scottish entrepreneur Sir Brian Souter has been the catalyst for expansion at Aberdeen firm Oteac. Sir Brian, who co-founded Perth-based transport giant Stagecoach Group with his sister, Ann Gloag, in 1980, and remains its chairman, was among the investors behind Oteac’s takeover by private-equity firm Lonsdale Capital Partners in October 2013. Neither the size of Lonsdale’s stake or the value of its investment have ever been revealed but Sir Brian is believed to have poured at least £10million into the business, which is based in Maryculter and specialises in integrated fire and safety engineering services.
Investors have a message for suffering US oil drillers: We feel your pain. They’ve pumped more than $1.4 trillion into the oil and gas industry the past five years as oil prices averaged more than $91 a barrel. The cash infusion helped push US crude production to the highest in more than 30 years, according to data compiled.
Royal Dutch Shell boss Ben van Beurden issued a plea to UK policy makers to “get on” with plans to maximise economic recovery in the North Sea yesterday. He also called on the UK government to review its supplementary tax charge on North Sea oil producers as it has made the operation of some fields unrealistic. Mr van Beurden said at a conference in London: “It needs to be looked at as the tax position is hindering viability.”