Archive: Thu Feb 2019

  1. Ministers say fracking rules will not be relaxed as concern grows over tremors

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    Rules governing tremors from fracking will not be relaxed, the Government has said, as public concern over earthquakes from the controversial process grows.

    A Government survey suggests opposition to fracking has risen with more than a third of people against the process and a leap in those citing earthquakes as a reason for their concern.

    The latest round of the Business Department’s public attitudes tracker, which quizzed 4,273 households in December, is the first since fracking restarted in the UK after seven years.

    It shows 35% were opposed to fracking, up from 31% in September.

    Just 13% supported fracking for shale gas, a slight decrease from 15% in September, while just under half (47%) neither supported or opposed it, largely because they did not know enough about it, the findings suggested.

    Support for hydraulic fracturing, which extracts gas from shale rock deep underground, has seen a general downward trend since the survey began in December 2013, while opposition has grown.

    The most common reason people have for opposing fracking is the loss or destruction of the natural environment, which more than six in 10 (62%) were worried about.

    But concern over the risk of earthquakes was the second most common reason for opposition, rising from 26% in September to 40% in the latest poll.

    Fracking restarted in the UK last autumn in Lancashire after it was suspended in 2011 following two earthquakes in the Blackpool area.

    After energy firm Cuadrilla began fracking at Preston New Road in October, work had to be halted on several occasions because tremors above regulated limits were detected.

    Cuadrilla and another energy company, Ineos, which also hopes to frack in the UK, have called for the regulations on tremors to be relaxed to allow them to exploit shale gas reserves.

    But a spokesman for the Business Department said: “The Government believes shale gas could be an important new domestic energy source, enhancing our energy security and delivering economic benefits including the creation of well-paid, quality jobs.

    “That’s why the Government has given the industry significant support to develop while ensuring our world-leading regulations remain in place to ensure fracking happens safely and responsibly.

    “We set these regulations in consultation with industry and we have no plans to review them.”

    The move was welcomed by the Campaign to Protect Rural England (CPRE) which also called on the Government to drop plans to fast-track fracking developments through the planning system.

    Daniel Carey-Dawes, infrastructure policy manager at the Campaign to Protect Rural England, said: “The Government has today met its obligation to protect our environment and the public, by refusing to entertain the desperate calls by industry for a relaxation of regulations on seismic activity as a result of fracking.

    “It must now take this damning evidence that fracking does not have the support of the public into consideration as it makes its decision on proposals to fast-track fracking.

    “Pursuing this plan would defy local democracy and remove the voices of local communities in decisions over fracking proposals in their area.”

  2. Renewables trade body appoints new directors as vice chairman steps down

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    A Scottish renewable energy trade body has announced the appointment of four new directors as its vice-chairman steps down from the role.

    Scottish Renewables announced today that current chairman Rob Forrest will remain in his current role as chairman.

    But David Cameron of EDF Renewables will relinquish his position despite only taking up the role in March 2018.

    Mr Forrest served as Scottish Renewables first chief executive from 1999 until 2004.

    From a list of 24 candidates, Susie Lind of EDF Renewables, Richard Hatton of Enercon, Rachel Anderson of Renewable Energy Systems (RES) and Mike Hay of Renewable Infrastructure Development Group (RIDG).

    The appointments follow the departure of Jeremy Sainsbury (Natural Power), David Cameron (EDF Renewables), Euan McVicar (Green Investment’s Group) and Colin Anderson (Banks Group).

    Claire Mack, chief executive of Scottish Renewables, said: “It is great to see so many members engaging in what is a vital process for the proper governance of the organisation at a complex and challenging time for all parts of our industry.

    “Increased participation in the election process, alongside the introduction of greater gender diversity, was one of our key organisational objectives, so I am pleased to see both reflected in this outcome.

    “I would like to say a big thank you to Jeremy Sainsbury, Colin Anderson and David for their contributions to Scottish Renewables over their many years as directors and wish the new directors all the best in their new roles.”

  3. Pipeline coating study could lead to £500k boost for Crondall

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    A new pipeline coatings study could save operators 25%, unlock more marginal fields, and eventually generate £500,000 for one of the organisations behind the research.

    The project will evaluate internal pipeline coatings, identify potential novel solutions and systematically test them in laboratory equipment.

    The study is a partnership between Heriot-Watt University, the Oil and Gas Technology Centre (OGTC) and the Oil and Gas Innovation Centre, and will be led by Crondall Energy’s flow assurance team in Aberdeen.

    The budget for the initial phase of the study is £110,000, includes six months of work at Heriot Watt University, with support from Crondall Energy engineers.

    A second phase could generate revenues totalling £500,000 for Crondall.

    The ultimate aim is to establish alternative polymer materials for improved internal coatings.

    Crondall Energy subsea director Murray Anderson said: “Commercially acceptable pipeline internal coatings are available and employed in the prevention of deposit build up, as well as corrosion prevention.

    “However, the behaviour of these coatings in the harsh conditions experienced in oil and gas pipelines is poorly understood.

    “Consequently, the polymers currently used in such organic-based coatings are compromised due to the lack of fundamental knowledge of their performance at operating conditions.”

    He added: “Internal pipeline coatings offer significant opportunities for the development of small pools in potentially eliminating the need for the major elements of conventional flow assurance solutions, including chemical, heat and insulation requirements.

    “However, there is currently no significant experimental evidence that allows a robust estimate of how a coated system might perform under oil and gas pipeline operating conditions”.

    Chris Pearson, marginal development solution centre manager at OGTC, said: “We are delighted to support a project that could lead to innovation in the field of flow assurance.

    “By delivering key improvements in this area we can reduce the need for intervention, lower the cost for marginal field developments and maximise economic recovery.

    “We look forward to seeing the outcome of this study and potential benefits for the oil and gas industry.”

  4. Energy price cap hike to push bills up by £117

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    Around 15 million households will see their energy prices rise after regulator Ofgem hiked price caps designed to protect those on poor value deals.

    The energy watchdog said it will increase the price cap for default and standard variable gas and electricity tariffs by £117 to £1,254 a year from April 1 due to hikes in wholesale costs.

    Ofgem said the price cap for pre-payment meter customers will also increase – by £106 to £1,242 a year from April 1.

    It insisted those affected will still pay a “fair price” for their energy as the increase reflects a genuine increase in underlying wholesale costs, rather than provider profiteering.

    It said even after the April increase, those on default deals – including standard variable tariffs (SVTs) – will still be saving around £75 to £100 a year on average thanks to the price cap, which was introduced in January.

    Dermot Nolan, chief executive of Ofgem, said: “Under the caps, households on default tariffs are protected and will always pay a fair price for their energy, even though the levels will increase from April 1.

    “We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering.”

    Ofgem will review the level of the cap again in August for the six-month winter price cap period, which comes into force on October 1.

  5. Opposition to fracking rising amid concern about earthquakes

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    Opposition to fracking has risen with more than a third of people against the process, a Government survey suggests.

    Concern over earthquakes caused by the process has also jumped in the past three months, the poll found, as the first fracking in seven years got under way in Lancashire.

    The latest round of the Business Department’s public attitudes tracker, which quizzed 4,273 households in December, shows 35% were opposed to fracking, up from 31% in September.

    Just 13% supported fracking for shale gas, a slight decrease from 15% in September, while just under half – 47% – neither supported or opposed it, largely because they did not know enough about it, the findings suggested.

    Support for hydraulic fracturing, which extracts gas from shale rock deep underground, has seen a general downward trend since the survey began in December 2013, while opposition has grown.

    In the latest survey, support for the process is back down to its lowest level, last seen in September 2017, while opposition is close to the highs of 36% seen in same period.

    The most common reason people have for opposing fracking is the loss or destruction of the natural environment, which more than six in 10 (62%) were worried about.

    Concern over the risk of earthquakes was the second most common reason for opposition, rising from 26% in September to 40% in the latest poll.

    Fracking restarted in the UK last autumn in Lancashire after it was suspended in 2011 following two earthquakes in the Blackpool area.

    After energy firm Cuadrilla began fracking at Preston New Road in October, work had to be halted on several occasions because tremors above regulated limits were detected.

    Cuadrilla and another energy company, Ineos, which also hopes to frack in the UK, have called for regulations to be relaxed to allow them to exploit shale gas reserves.

    The Government has indicated it does not plan to alter the rules.

    Dr Doug Parr, chief scientist at Greenpeace UK, said: “Fracking’s low and declining popularity is a very real and practical problem for the industry.

    “They say they need the Government to weaken safety regulations, on top of removing home-owners’ property rights and local democratic control, and the Government isn’t going to want to do many more big favours for a loss-making industry that people want to fail.

    “Ministers should put together a proper energy strategy based on the renewable technologies that are getting ever cheaper and enjoy strong public support.”

  6. Peterhead firm IOS comes under new ownership

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    A north-east oilfield services business is targeting further growth after coming under Norwegian ownership.

    Independent Oilfield Services (IOS) has been snapped up by WellConnection Group, an inspection, maintenance and repair (IMR) firm, for an undisclosed fee.

    WellConnection is portfolio company of EV Private Equity, an oil and gas investor with offices in Stavanger, Houston and Aberdeen.

    Founded in 2014, IOS is a specialist in IMR and storage. In late 2017, the firm committed to investing £5.5 million in its Longside supply base near Peterhead.

    In January 2018, it won contracts worth more than £12.5m with Sumitomo Corporation Europe and Odfjell Drilling.

    IOS was 95% owned by the Geddie family, with the remaining 5% held by accountant Symon Chree Wadsworth.

    The majority of the stakes were held by James and Angela Geddie, according to IOS’s most recent confirmation statement, published by Companies House.

    They are parents of managing director Glynn Geddie, a former touring car driver.

    His job title will change to chief executive of WellConnection IOS, the new name for IOS.

    The jobs of the 60 people IOS employs in the north-east are safe.

    Mr Geddie said: “We are excited to become part of WellConnection Group.

    “The company is an expert in its field and boasts excellent facilities, making this a huge opportunity to extend our offering for new and existing customers in the UK and internationally.

    “Our existing workforce will all be very much with us on this new chapter of the business, and we look forward to expanding the team over the coming months.”

    The acquisition marks the entrance to the UK market for WellConnection, which has bases in Stavanger, Mongstad and Hammerfest.

    Its chief executive, Rune Haddeland, said the takeover would increase its offering and benefit the customers of both firms.

    He said: “IOS has a strong and diverse customer base, a complementary business model and a collaborative culture that mirrors our own.

    “This acquisition allows us to share knowledge and benefit from integrated technology, systems and processes.”

    EV has invested in a number of north-east firms, including Deep Casing Tools and Enpro Subsea.

  7. Big wind keeps on churning Vattenfall profits

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    Swedish wind developer Vattenfall experienced an increase in pre-tax profits for 2018 as big wind developments continued to churn sales.

    The firm saw a 2018 profit of £1.1 billion, up from £1.06 billion in 2017.

    Vattenfall also saw an drive in sales, mostly from wind development.

    The wind developer tipped £13 billion in sales last year, up from £11.3 billion in 2017.

    President of Vattenfall Marcus Hall said: “Wind power made significant progress in 2018.

    “We started the year with a winning bid for Hollandse Kust Zuid 1 & 2 700 megawatt (MW), an unsubsidised offshore wind farm in the Netherlands.

    “In Scotland Aberdeen Bay (97MW) was inaugurated, and in Denmark we made the decision to invest in the Kriegers Flak (605 MW) offshore wind farm.

    “Also offshore the Danish coast, construction of the Horns Rev 3 (407 MW) wind farm continued on schedule, with full commissioning scheduled for 2019.”

    Vattenfall has a number of projects in Scotland, including the newly constructed Aberdeen Bay development, able to power 70% of the city’s energy requirement, and a number of onshore wind projects such as the Clashindarroch Windfarm

    The Swedish wind firm revealed in December that it has applied for consent to “prolong” the life of the Aberdeen Bay windfarm.

    It confirmed it had tabled a request to Marine Scotland for a design life extension from 22 years to 25 years of the project, also known as the European Offshore Wind Deployment Centre (EOWDC).

  8. Former Petrofac chief convicted in bribery case

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    A former global head of sales at Petrofac has been convicted as part of a bribery investigation.

    The UK Serious Fraud Office (SFO) confirmed today that David Lufkin, 51, had pleaded guilty to eleven counts of bribery.

    The conviction relates to “corrupt offers” made to influence the award of contracts to Petrofac in Iraq and Saudi Arabia.

    The offers of payments were to influence contract awards of more than £2.7 billion in Saudi Arabia and £565 million in Iraq.

    Petrofac said no charges had been brought against the company, but did confirm that a number of the firm’s employees are alleged to have “acted together” with Mr Lufkin.

    Rene Medori, chairman of Petrofac, said: “The SFO has chosen to bring charges against a former employee of a subsidiary company.

    “It has deliberately not chosen to charge any group company or any other officer or employee.

    “In the absence of any charge or credible evidence, Petrofac intends as a matter of policy to stand by its employees.”

    “Petrofac has policies and procedures in place designed to ensure that we operate at the highest levels of compliance and ethics.”

    Payments of £1.7m were made by Petrofac to two agents towards the award of a £255.3 million engineering, procurement and construction (EPC) contract on the Badra oilfield in Iraq.

    The contract was ultimately awarded to Petrofac in February 2012.

    The SFO added that corrupt offers of payments were also made to influence the award of contract variations to the Badra Phase One EPC contract, and for the extension of the Badra operations and maintenance (O&M) contract.

    But Petrofac was unsuccessful in obtaining the contracts and no payments were made to the agent.

    Payments of more than £3m were also made by Petrofac for a Fao Terminal contract.

    Further payments of approximately £34.8 million were made by Petrofac for contracts awarded in Saudi Arabia, between July 2012 and November 2015.

    Mr Lufkin will be sentenced at a later date.

  9. Total sees significant increase in sales and income over 2018

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    French energy giant Total has announced significant increases in sales and consolidated net income over 2018.

    The oil firm saw sales hit more than £161.8 billion in 2018, an increase from £132.5bn in 2017.

    Total saw growth in its consolidated net income, which increased from £6.3bn in 2017 to £8.8bn in last year.

    The firm also witnessed a 28% jump in its adjusted net income, to £10.5bn, supported by higher oil and gas prices.

    Total today also announced it had made a significant gas condensate discovery on the Brulpadda prospects in the Outeniqua Basin, 175 kilometers off the southern coast of South Africa.

    The Brulpadda well encountered 57 meters of net gas condensate pay in Lower Cretaceous reservoirs.

    Total’s chairman and chief executive, Patrick Pouyanne, said his firm was “continuing to expand along the value chain of integrated gas and low carbon energy.”

    He added that Total’s 2018 finances were a result of his firm “maintaining its financial discipline”.

    In September, Total revealed that its exploration well at Glendronach had uncovered one of the UK’s biggest gas finds in a decade.

    An appraisal well will be drilled on the field next year to firm up initial estimates, which indicate that 1 trillion cubic feet of gas could be recovered.

    Last month, project partners Cnooc International and Total announced another North Sea find at the Glengorm exploration well, estimated at close to 250 million barrels of oil equivalent.

    Total is also reportedly close to selling a stake in the Laggan-Tormore project west of Shetland to private equity firms.

    It is understood Albion Energy and First Alpha Energy Capital are ready to pay £1 billion for 20% of Laggan-Tormore and interests in a number of smaller North Sea fields Total acquired from Maersk Oil last year.

    Total completed the takeover of Danish conglomerate Moller-Maersk’s oil and gas business in March 2018.

    The Paris-headquartered firm confirmed the £5.8billion deal made it the second largest operator in the North Sea with an output of 500,000 barrels per day by 2020.

    The purchase of Maersk Oil handed Total a 49.99% operated stake in one of the UK’s biggest offshore gas developments, the Culzean field, which is expected to produce first oil later this year.

    However, the deal caused a number of workforce issues concerning jobs and rota changes.

    Around 70 staff lost their jobs at Total Norway as a consequence of the deal.

    Both businesses employed about 700 people in exploration and production in Aberdeen when the deal was announced in August 2017.

    Total said it would have to lay off about 300 employees in the north-east as part of the integration process.

    Union disputes over proposed rota changes from two weeks on, three weeks off (2/3) to three weeks on three weeks off (3/3) dogged Total throughout 2018.

    Following protracted discussions between unions and the French oil firm, crew on Total’s Alwyn, Dunbar and Elgin platforms ultimately voted to move to 3:3, in exchange for a 15% pay increase.

  10. Equinor begins UK drilling campaign

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    Norwegian energy giant Equinor has kicked off a UK North Sea exploration campaign.

    Two exploration wells – one Equinor-operated and one partner-operated – are already underway.

    Three more Equinor operated wells will be drilled later in the year.

    Jenny Morris, Equinor’s vice president for exploration in the UK, said: “Our continued activity further strengthens our position as an ambitious explorer in the UK.”

    In January, drilling started at the Bigfoot exploration prospect located near the Mariner field.

    Mariner is an Equinor-operated field development due to start production later this year. The well is drilled by the Seadrill-operated drilling rig West Phoenix.

    The same rig will later drill the Pip prospect in the relatively underexplored East Shetland Platform.

    Both Bigfoot and Pip were awarded in the 29th licencing round in 2017 with Equinor as operator and BP as partner.

    “These are two interesting licences, with Bigfoot in an area of the North Sea that’s relatively mature and Pip testing the underexplored margins of the basin,” Ms Morris said.

    “Both opportunities have been matured through the acquisition of new seismic data and will provide more answers about the remaining potential on the UKCS.

    “We continue to believe in new exploration opportunities on the UKCS and a combination of new data, latest technologies, data analytics and continued high-quality regional subsurface work has the potential to unlock these unproven accumulations.”

    The exploration campaign also includes an appraisal of the Verbier discovery which was announced in October 2017.

    The results will help refine the current estimated volumes which range between 25 and 130 million barrels of oil equivalent.

    Later in the year Equinor will use the West Phoenix drilling rig to drill the Lifjellet prospect in licence P2378, with partner Shell.

    The licence was awarded as part of the 30th UK licensing round in October 2018, indicating an efficient award-to-spud process for the partnership.

    Equinor also recently acquired an 8% interest in an ENI operated licence (P1620) north west of the Culzean field.

    Drilling operations on the Rowallan prospect in the P1620 licence started in December.

    Deirdre Michie, chief executive Oil and Gas UK said: “Equinor’s exploration campaign demonstrates the significant value the UK Continental Shelf offers investors.

    “This is a vote of confidence in the basin, crucial to successfully realising its full potential outlined in Vision 2035.

    “Equinor’s campaign builds on the momentum generated by CNOOC’s recent Glengorm discovery and Total’s Glendronach find.

    “It shows how the UK’s offshore oil and gas industry remains essential for security of energy supply, supporting hundreds of thousands of jobs and contributing billions to the UK economy.”

  11. ‘Unacceptable’ delay on answers for fatal Shetland helicopter crash

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    An MP has condemned an “unacceptable” delay on victims’ families getting answers about a fatal helicopter crash in Shetland more than five years ago.

    Four people were killed when a Super Puma L2 helicopter crashed two miles west of Sumburgh Airport in August 2013.

    Alistair Carmichael, MP for Orkney and Shetland, condemned the delay on a decision from investigators on whether to hold a fatal accident inquiry (FAI).

    An FAI must occur unless the Crown Office and Procurator Fiscal Service (COPFS) decides to pursue criminal charges.

    Speaking at a House of Commons debate yesterday, Mr Carmichael said families are being denied closure.

    He said: “For those families, five-and-a-half-years after the death of their loved ones, not to know whether there are to be criminal proceedings or whether there is to be a fatal accident inquiry, is unacceptable.

    “It does not allow them to get the closure that they absolutely deserve and need.”

    The victims of the crash were Sarah Darnley, 45, from Elgin, Gary McCrossan, 59, from Inverness, Duncan Munro, 46, from Bishop Auckland, and George Allison, 57, from Winchester.

    The Air Accident Investigation Branch (AAIB) report into the incident was published in 2016 but a decision has not yet been made by the Procurator Fiscal.

    A COPFS spokesman said the nearest relatives “have been kept informed” but would not comment further in order to protect any potential future legal proceedings.

    Mr Carmichael highlighted that it is not an isolated case, with an earlier 2009 super puma crash off the coast of Peterhead not having an FAI until 2014.

    He said this was due to prosecutors not being able to begin their work until the AAIB completes theirs.

    Mr Carmichael said he was told by the Lord Advocate, Scotland’s chief prosecutor, the Crown Office had to take the AAIB to court in order to acquire flight data from the 2013 Sumburgh crash.

    At the debate, he told MPs that a new way of working should be considered.

    He added: “I understand the need to keep the integrity of the AAIB intact, but we are dealing here with two public bodies, both broadly charged with the same responsibilities.

    “Surely there is a better way than having to have one public body take another to court in order to get access to relevant evidence?”

    Alistair Carmichael is the MP for Orkney and Shetland.

    The debate yesterday was aimed at assessing whether there is a need for a public inquiry into offshore helicopter safety.

    Should an FAI take place, which Mr Carmichel said is “all but certain”, the Scottish Sheriff presiding over it would be able make recommendations on whether a public inquiry is needed.

    Gordon MP Colin Clark said, at this stage, calls for an inquiry are “not constructive” as the offshore industry has a strong safety agenda.

    However, he added he was “not comfortable” that a decision has not yet been reached on the Sumburgh incident.

    His colleague, Mr Carmichael, added: “That may involve issues which would be appropriate to a public inquiry but unless and until we get to the stage that we have the FAI we simply do not know that.”

    A Crown Office spokesman said: “This has been a complex investigation, and we appreciate that it has been a difficult time for the families and for all those involved.

    “The nearest relatives of those who lost their lives have been kept informed of significant developments in the investigation and we will continue to provide information to them.

    “In order to protect any potential proceedings and to preserve the rights of the families, the Crown will not comment further at this stage.”

  12. Balmoral’s Jim Milne honoured at Subsea UK awards

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    Oil and gas veteran Jim Milne was last night recognised for his commitment to the north-east’s subsea industry.

    The chairman and managing director of Balmoral Group was given the Outstanding Contribution honour at the Subsea UK Awards at the AECC.

    It is the latest in an impressive haul of awards for the Aberdeen businessman, whose career spans more than five decades.

    Mr Milne set up Balmoral Group in 1980 with just five employees and has since built the engineering services group up to a workforce of nearly 500.

    Last year the group opened a £20million centre for testing subsea technologies at its base in Aberdeen.-

    The 78-year-old has received a number of top honours during his time in the industry, being made a CBE in 1994 and given an honorary doctorate from the Robert Gordon University five years later to mark his achievements.

    According to the last Sunday Times Rich List, he was worth an estimated £162m in 2017.

    In September 2016, he was inducted into the North Sea industry “hall of fame” at the Press and Journal Gold Awards.

    Along with its new subsea testing centre, Balmoral Group made several new investments last year including an acquisition of pipework company Servomac.

    It also increased its interest in the renewables sector with the takeover of Seaproof Solutions, a supplier of cable protection systems to the offshore wind industry.

    Mr Milne said the new investments ensured Balmoral is well placed to capitalise on increased activity in the oil and gas market, and to face the future even in the uncertainty of Brexit.

    More than 600 people attended last night’s ceremony.

    Alongside Mr Milne, Motive Offshore Group was given the company of the year accolade.

    Royal IHC won the Global Exports award and Infinity Oilfield Engineering was named Best Small Company.

    The Innovation and Technology gong went to C-Kore Systems, while JFD was recognised with the Innovation for Safety Accolade.

    Ryan Fernando, of Aker Solutions, received the Emerging Young Talent award.

    The awards ceremony is took place following the second day of Subsea Expo, Europe’s largest conference and exhibition for the sector.

    Neil Gordon, chief executive of Subsea UK, said: “After a number of challenging years for the subsea industry, it is welcoming to see sector growing again. The constant support from businesses demonstrates the industry is looking to progress further.

    “The standard of entries for this year’s awards continues to showcase the best characteristics of the UK subsea sector and it’s essential that we celebrate and acknowledge the talent, leadership and contributions as we continue to evolve.”

  13. Oil sector still has plenty of waste to ‘get after’, BP boss says

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    The oil industry is still guilty of rampant “waste” despite concerted efforts to drive efficiency during the downturn, a boss at BP said yesterday.

    Ariel Flores, BP’s North Sea regional president, said the UK company remained focused on capital discipline and “doing more with less”.

    He said BP started 2018 with 45 warehouses spread across the UK, but had vacated 17 by the end of the year.

    Those closed warehouses contained more than £20 million worth of equipment that no longer held any value, Mr Flores said.

    “That’s genuine waste,” Mr Flores said, adding: “There’s still a lot more to get after.”

    In an ideal world, BP wouldn’t have any warehouses, he said. The only reason for ordering a component is a lack of faith.

    Mr Flores said: “It comes down to trust. The reason we order something is because we don’t trust. The reason we don’t trust is because of some legacy issue that happened five or six years ago.”

    Other industries can get parts and materials “as soon as required”, and the oil sector should be no different, Mr Flores said at the launch event for EY’s annual review of the oilfield service sector.

    Operators should trust the oilfield services firms to provide equipment “just in time”, he said.

    That would eliminate networks of warehouses full of equipment gathering dust, and stop firms paying for things twice, in many cases.

    Furthermore, companies should also be able to “build something right the first time”.

    Mr Flores also said BP had learned to make smarter investments.

    He said: “We’re not going after elephants any more – big oil field finds. Actually, that did not work.”

    He added: “We’re not investing hundreds of millions or billions in alternative energies any more. We’re working with venture capital to put smaller bets on emerging technology.”

     

  14. West of Shetland stranded pools ‘could yield additional £10bn’ with new tech

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    “Stranded pools” off Shetland could yield £10 billion in additional revenue, according to a senior subsea engineer.

    Lee Thomas, a lead subsea project engineer with WorleyParsons, claimed last night that his new technology could unleash a gas boom in the North Sea, provided big operators “come on board”.

    Mr Thomas is currently studying the economic impact of his Pseudo Dry Gas technology to stranded gas fields north of Shetland.

    He is proposing a gas gathering corridor stretching 124 miles wide and 1 mile deep while working on in conjunction with the Oil and Gas Technology Centre (OGTC), the Oil and Gas Innovation Centre (OGIC) and Strathclyde University to prove the huge financial potential of his technology.

    The technology aims to make long distance subsea tiebacks which have typically not been economically or technically feasible, commercially viable.

    Pseudo dry gas technology eliminates the need for topsides and costly compression, along with their associated high C0emissions, by reducing back pressure in the pipeline to create a more energy efficient flow. This allows much greater tie-back distances.

    Mr Thomas said: “People don’t realise just how much stranded gas there is around the world and the problem is most people in the industry just haven’t heard of this type of technology.

    “The Oil and Gas Authority (OGA) has confirmed the data on the £10bn capital expenditure (capex). We can make this work, it’s going to help a lot of people.”

    Mr Thomas also urged big North Sea operators not to be “scared” to put his stranded pools technology to the test.

    He added: “It can be too much for some people to grasp sometimes, but we’re the first to really look at this problem.

    “But we’re slowly getting the attention of big North Sea operators and we need to start looking at a field trial within the next 18 months.”

    Graeme Rogerson, project manager of small pools at OGTC, said: “We’ve got all this gas reserve and it’s stranded. I got really excited about the technology and the potential that it has.

    “What this study allows us to do is to present to our members and they will either invest themselves or commit in-kind support.

    “This has been backed up with real data from the OGA and it’s starting to make a lot of sense to a few operators.”

  15. ‘Smoother sailing’ for oil and gas supply chain, Woodmac claims

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    The global offshore upstream supply chain saw signs of recovery in 2018, and this looks set to continue in 2019, according to global natural resources consultancy Wood Mackenzie.

    As project FIDs increase, demand for equipment and services are buoying the prospects for the upstream supply chain.

    But the downturn left its mark on the sector.

    Projects remain leaner and phased, and cost discipline remains high on the agenda. The supply chain continues to focus on compact, modular and standard solutions as operators seek the shortest cycle times.

    But can this be maintained as the market improves?

     Subsea demand increasing

    Mhairidh Evans, principal analyst, subsea supply chain, said: “Demand for subsea equipment is one of the best leading indicators of offshore market activity. Volumes are recovering and Wood Mackenzie expects an approximate 40% increase in 2018 in comparison to the previous year.

    “It’s likely that demand will remain steady for the next few years, averaging about 300 subsea trees per year, an encouraging sign for the sector.

    “The supply side story has evolved too. Consolidation was necessary to survive the down cycle, which represented the lowest demand floor and longest depressed market in recent history. We estimate subsea manufacturing capacity reduced by 25% simply by closing plants and re-distributing resources.

    “The result is manufacturing plants that can tighten much quicker than before, even with the smaller, more efficient operations that today’s projects demand.”

    She added: “Key operators in the subsea space are becoming aware of this shift in the market. Procurement teams and category management will need to strategise internally and with their preferred suppliers, preparing for anticipated price inflation and potentially increased lead times.

    “While the subsea market as a whole remains oversupplied still, another busy year in 2019 will change that. We think the window of opportunity to lock in preferential conditions in 2019 is dwindling and this will be more pronounced as we edge closer to 2020.”

    Floating production revisiting historic highs but looks different

    Demand for floating production, storage and offloading vessels (FPSO) should be near the highest seen since before the downturn. Adopting modular and standardised FPSOs in shipbuilding lends itself to cost savings and efficiencies – ideally suited to operators looking to scale down and reduce costs.

    Senior research analyst Catarina Podevyn said: “Overspending is a thing of the past. Despite the market’s recovery, we expect development budgets will have to stretch further than ever.

    “Operators will be under added pressure to maintain project discipline, and we can expect to see alternative contracting models that reduce technical and financial risk to operators and optimise efficiency.”

    She added: “We expect a higher uptake of the build-own-operate-transfer (BOT/BOOT) contract models. With this approach, operators lease an FPSO at a higher rate before buying it outright. This frees them form the upfront financial risk that would normally accompany a turnkey approach.  Contractors, however, take on project execution risk and must hit deadlines or face losses. We expect this will prompt more sub-contracting, particularly with many FPSOs nearing award.”

     Opportunities for competitive floating rig rates remain

    It’s been a buyer’s market in the offshore rig segment, as operators hold contracting power for all but the ultra-deepwater, harsh environment rigs, where supply is limited. Day rates for floating rigs stayed low in 2018. How long will this last?

    Principal analyst Leslie Cook said: “Despite encouraging signs indicating the potential for higher demand, we believe day rates will remain low throughout 2019.

    “Because of low day rates, drilling contractors have preferred short-term con-tracts, hesitating to lock in assets on longer charters. Market utilisation hovered near 65% on continued rig oversupply. This, coupled with rig owners needing to bid aggressively for contracts or else see their assets idle, will keep rates for most rig types low.”

    Ms Cook added: “However, exploration is increasing. That, together with the likelihood of further consolidation among rig contractors and older assets being taken off the market, should drive market fundamentals to a point where day rates begin to rise appreciably towards the end of the year. We expect the rig market to balance out in 2020.”

  16. Aberdeen businessman hopes to revolutionise offshore testing

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    An Aberdeen businessman is aiming to revolutionise non-destructive testing offshore with a new digital simulation tool.

    Colin Rawlinson and his brother, Paul, have developed the UTman software, an online system which will allow companies to test the competency of inspectors who use ultrasonic tools to check for issues like corrosion.

    The pair, through their company UTsimX, believe it could save thousands of pounds in training costs and address a gap in the market in developing competency tests for specific oil and gas assets.

    Colin, who is based in Aberdeen and works in the marketing side, has had interest from the aerospace sector as well as a major subsea company for using the simulator to accredit more than 1,000 welding inspectors.

    The programme itself has been created by Paul, who has worked throughout his 40-year career as a pipeline inspector, and can be downloaded onto a computer, with testing completed within an hour.

    The pair have entered into a partnership with a training and consultancy firm, Argyll Ruane, a division of the Institution of Mechanical Engineers, to validate the tool for use.

    Colin said: “At the moment the only way they can test their skills is by using the actual, physical machine, which is very expensive in the region of £10-20,000.

    “Instead, we can enable people to do a virtual trade test in their own home.

    “They can download our software on their laptop and find these virtual defects. We can watch on Skype, and within 60 minutes we can figure out whether a person is competent.”

    The aim of the tool is to test for competency, going beyond standard qualifications, with tests tailored to specific assets.

    In his regular role as a headhunter, Colin said he has received “more and more” interest from oil and gas firms and other sectors to ensure workers are competent.

    Colin Rawlinson

    The first version of the simulator was designed more than a decade ago by brother Paul, but Colin found the right way to market the technology shortly after attending the Elevator business accelerator programme in 2015.

    He said: “I didn’t know then how to commercialise it properly. The ‘eureka moment’ was when I realised the market wasn’t just for training but for proving competency. That’s where the gap in the market is.

    “It’s a lifetime mission. I began this journey years ago telling people they could use the software to train people, but it was too disruptive.

    “However, a new generation is in place now and all of a sudden being disruptive is cool.”

    UTsimX is now in early talks with the Oil and Gas Technology Centre on potential funding and, in the long-term, creating a standardised test programme for the sector.

    Chris Kirby, general manager at IMechE Argyll Ruane, has agreed to validate the tool, and he sees wide applications for it.

    That validation will be done by comparing the online test with the real world environment, which Mr Kirby believes is likely to go through.

    He said: “Every major oil and gas inspection company could have its own validation programme specific to the type of assets they want to test.

    “This goes beyond the normal qualifications which every operator needs to hold – this is asking ‘are they are able to conduct the specific type of test that we see on our asset?’

    “It will be done under examination conditions and should take under an hour, and it will be lower cost than anything they can do at the moment.”

  17. Offshore renewables ‘real and functioning in the north-east’, says ORE Aberdeen lead

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    The man in charge of “drawing out” the skills from the oil and gas supply chain into the Scottish renewables marketplace has suggested the north-east is the “best place to do business” right now.

    Hugh Riddell, the Offshore Renewable Energy (ORE) Catapult’s point of contact in the north-east, has been tasked with growing relationships between the two sectors.

    Having only been in post a number of weeks, his is attendance at Subsea Expo 2019 was to get a sense of how his mandate can best be achieved.

    With 30 years in the oil and gas industry, Mr Riddell has shifted into the Scottish offshore renewables sector bringing his experience and an extensive list of contacts.

    He previously worked as sales manager at Swire Oilfield Services, client manager at Technip, before taking up a directorial position at Mither Tap Limited.

    He said: “I can aid companies up here because of my breadth of contacts from working in the oil and gas sector.

    “Offshore renewables is a real and functioning industry in the north-east and I’ve been speaking to lots of companies who want to make that transition also within their business.

    “You’ve got all these skills and experience from the oil and gas sector that could easily be used in offshore renewables here.”

    Mr Riddell has been drafted to help the North Sea supply chain get ready to bid for work in the offshore renewable energy sector, mainly via the Fit For Offshore Renewables (F4OR) programme.

    He aims to provide advice to firms looking the enter and flourish within the renewables supply chain in the north-east.

    He said: “I’ve mainly been approached about involvement in offshore renewables and many are keen to see if their technologies are transferable, particularly offshore wind.

    “We’re very keen to talk to these companies and we’re always looking to speak to those who have technology that is cross-sector.

    “There’s a number of challenges we’re looking at, especially in robotics, digital and data, and there’s a number of companies who fit into that bracket.”

    Mr Riddell will also be the point of contact for the ORE Catapult as Swedish wind developer Vattenfall look to grow the amount of projects taking place at the European Offshore Wind Deployment Centre (EOWDC).

    He added: “There’s a number of demonstration projects that Vattenfall are keen to get going with, so I’ll be working on that.

    “Up to this point, we’ve successfully tested a number of technologies at our Levenmouth and Blyth facilities but it will be great to test them within a living, working windfarm.”

  18. Bank Of America: Oil demand growth to hit zero within a decade

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    By 2030, oil demand could hit a peak and then enter decline, according to a new report.

    For the next decade or so, oil demand should continue to grow, although at a slower and slower rate. According to Bank of America Merrill Lynch, the annual increase in global oil consumption slows dramatically in the years ahead. By 2024, demand growth halves, falling to just 0.6 million barrels per day (mb/d), down from 1.2 mb/d this year.

    But by 2030, demand growth zeros out as consumption hits a permanent peak, before falling at a relatively rapid rate thereafter.

    The main driver of the destruction in demand is the proliferation of electric vehicles.

    Bank of America did offer a few caveats and uncertainties. The growth of EVs hinges on a handful of key metals. Lithium, for instance, is mined and produced in large concentrations in a few Latin American countries.

    But cobalt looms as a larger concern for some automakers. Roughly 62 percent global cobalt output is found in the Democratic Republic of Congo. An executive from Ford said recently that automakers might feel compelled to invest directly in cobalt production over fears of securing adequate supply. “I fully anticipate we’re going to keep a lot of pressure on that cobalt production,” Ted Miller, head of energy storage strategy and research at Ford, said at a mining event in South Africa. “Today it looks feasible but it’s a scenario we’re going to have to watch.”

    The DRC just held a divisive election, and although the transfer of power has been mostly peaceful, the country has historically suffered from political instability. “Any major disruption to cobalt today would likely curb EV proliferation in the early 2020s, in turn supporting long dated crude oil prices,” Bank of America Merrill Lynch warned.

    There are alternatives to cobalt, but that would merely put pressure on other materials. “Car producers may gradually substitute from cobalt to nickel over the next two decades. In turn, this shift may lead to soaring demand for nickel, creating another supply squeeze as mine expansion plans are limited,” BofAML analysts wrote in their report.

    There are a long list of other uncertainties that complicate such medium- and long-term forecasting. A brewing economic downturn, which may or may not hit in the next year or next few years, could linger into the 2020s. That would alter oil demand forecasts, but in complicated ways. Slower economic growth would put a dent in oil prices via lower demand, but a lower price itself could keep consumers hooked.

    The EV market is also rife with uncertainty. EV sales are growing quickly, with the number of EVs on the roads picking up pace. Automakers are set to roll out dozens of new models, which will expand choice and awareness, while also making progress on price, range, and performance. Bank of America Merrill Lynch sees EVs having a “meaningful negative impact” on oil demand from 2021 onwards.

    Then, of course, there is the small matter of policy, which can cut both ways. Bank of America said that “the US’s feeble commitments to climate action, fuel efficiency standards, and sulphur-limit reductions in shipping (IMO),” could slow EV adoption. But the next administration could also reverse course and step up climate ambition.

    Even when breaking down oil demand into various segments, there is a lot of change going on. “EVs are shifting demand away from gasoline, IMO causes switching into diesel, and strong petchems demand growth is shifting demand toward the light part of the barrel, including NGLs in particular,” BofAML wrote. “We are at the beginning of a new age of uncertainty for oil producers, refiners and miners alike.”

    Nevertheless, despite all of those uncertainties, the outlines of the trajectory are clear. Oil demand in the developed world saw a temporary boost over the last four years or so because of the collapse of oil prices. That has mostly run its course. Demand “should return to outright declines as the price effect wears off and efficiency takes over,” BofAML wrote.

    Emerging market demand should continue to grow as more people acquire cars. China, however, has made a major EV push and its demand growth is already starting to slow.

    “The major driver of structural change in oil demand trends in the next five years and beyond is expected to be electric vehicles,” BofAML said. By 2020, EVs will capture 5 percent of global vehicle sales, which will balloon to 40 percent by 2030, before rising to 95 percent by 2050.

    All of that implies a peak in oil demand by 2030, a little over a decade from now. We are in the midst of the “biggest structural shift in demand growth since the proliferation of the car began in the early 1900s,” BofAML concluded.

    This article originally appeared on Oilprice.com

     

  19. North Sea tides powering growth for EC-OG

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    North Sea tides are powering growth and investment in an award-winning Aberdeen-headquartered firm, according to the company’s business development chief.

    Paul Slorach of EC-OG claims the firm is not only close to garnering the required investment to take its technology to market, but will also quadruple its current staff numbers over 18 months.

    The Bridge of Don firm has developed a turbine seabed device at the European Marine Energy Centre in Orkney able to provide autonomous power to subsea infrastructure.

    Primarily targeting the offshore oil and gas sector, the EC-OG Subsea Power Hub (SPH) underwater battery unit can connect to an array of subsea vessels and equipment.

    EC-OG, based at Davidson House in Aberdeen Innovation Park, is also looking to expand office space over the next four to six months as it achieves its investment goal.

    Mr Slorach said: “It’s definitely happening. We’ll be taking more office space at Davidson House. In terms of growth we’re at around 25 people at the moment. All being well, by the end of the year we’ll be approaching 40 and in the next 18 months around double that.

    Winner of Subsea UK’s Best Small Business Award 2017, the firm also has a new workshop currently in construction at the Nevis Business Park that will become a facility for building future Subsea Power Hubs.

    Mr Slorach said “predicted sales” are driving the sense of expectant growth of EC-OG.

    While he was unable to go into detail so close to any announcement, Mr Slorach was confident of impending deals.

    He said: “We’re on the cusp of commercialisation. The product is ready to go into the market. We’re just trying to secure those first orders at the moment. In the next couple of months we should have some positive news on that.

    “What we’ve spent the last 12 months doing is focusing on the battery side of the technology. We’ve developed our own proprietary battery module recognising that some of the commercial systems have moved forward dramatically in the last few years. That’s now ready to go out to the market. That helps with the financial side of the product, as it gives us total control of the technology.”

    With EC-OG’s core technologies focused on energy conversion and storage, there’s also the opportunity to flow into other markets, such as the growing renewables sector. The company recently became a member of the Aberdeen Renewable Energy Group (AREG).

    Mr Slorach said: “Getting to the right people can be frustrating at times and for a small company that can be pretty hard.

    “It’s great for future diversification opportunities. Essentially we want to use that core technology outside of oil and gas or in oil and gas but through different applications, such as decarbonisation.

    “AREG is going to help drive that forward and it helps to get in contact with operators to look at the future electric vehicle market or offshore wind inspection opportunities.”

  20. Orkney firm is making waves

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    Orkney has become the epicentre of great progress in the Scottish renewables supply chain.

    Leask Marine is one firm which has been quietly plying its trade there, and has had its finger in the pie of almost every major project in the UK.

    The list of big UK contracts is eye watering, from Danish wind giant Orsted’s southern North Sea Walney Extension, Burbo Bank, Borssele and Race Bank projects to ScottishPower’s East Anglia ONE and THREE offshore wind farms.

    In Scotland, Leask Marine is the one constant in every major wind development off our coastline, with Equinor’s Hywind project, Aberdeen Bay wind farm, and the soon to be completed Beatrice Offshore Wind Farm.

    Due for completion in 2019, Beatrice’s 84 turbines will be capable of providing sufficient clean and sustainable power for the equivalent of 450,000 homes.

    Leask Marine is also already on the books for the upcoming 950-megawatt Moray East Offshore Wind Farm and 77-turbine Inch Cape development in the North Sea.

    For a small firm from Orkney, winning such large contracts might seem unlikely.

    But managing director Douglas Leask attributes his firm’s contract success to a hardworking team and “being proactive” in the marketplace.

    He said: “We try to keep our ear to the ground as we know most of the main developers. We try to be proactive and approach them first and sell our experience rather than a sales pitch.

    “It all sort of began in wave and tidal through the European Marine Energy Centre (EMEC). That was our training ground.

    “Then came the crash in the market a few years back and we had to re-evaluate and diversify into other things, and offshore wind was one of them.

    “As a company, we’re trying to grow and expand as best we can.

    “Leave a good job behind you and you get a good reputation.”

    On its own patch, Leask has been involved in Simec Atlantis Energy’s MeyGen tidal power project in the Pentland Firth, and Nova Innovation and CorPower marine energy projects at EMEC in Orkney.

    In December, the firm was awarded the Outstanding Service Award at the Scottish Green Energy Awards.

    Virtually on the same day it announced it was investing £1.5 million in a submersible drilling rig and a marine test platform, thanks to financial support from Highlands and Islands Enterprise and development agency Scottish Enterprise.

    Mr Leask said that – weather dependant – Leask Marine can top more than 50 staff members during the peak summer months.

    Yet he wants to continue to expand the firm globally within the burgeoning renewables marketplace.

    He said: “We want to win a bigger slice of the cake in offshore wind. We have a project and an offshore drilling rig for an anchor solution that we’re trying to develop for the global market right now.”

    Easily transportable and capable of operating in turbulent sea conditions, the unit Leask Marine intends to design, manufacture and test would be the first of its kind and size in the world.

    The project has received backing from Scottish Enterprise with a £488,688 research and development grant.

    Leask Marine has also bought a 98ft Numitor mobile marine test platform and other equipment with the assistance of a £70,000 grant from Highlands and Islands Enterprise.

    Michael Cannon, head of innovation grants and open innovation at Scottish Enterprise, said: “Leask Marine is a fantastic example of an innovative company with global ambitions.

    “Increasing business innovation is critical to maintaining Scotland’s competitiveness and helping companies compete in the global marketplace.”

  21. Serica to push ahead with R3 plans at Rhum field

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    Serica Energy has confirmed it will push ahead with BP’s shelved plans to re-enter an old well at the Rhum field.

    The Rhum R3 project has the potential to boost production from the field, which Serica now 50% owns and operates.

    Serica acquired operatorship of Rhum, along with Bruce and Keith last year, following a series of deals last year, including a high-profile agreement with BP.

    Chief executive Mitch Flegg said the firm will not “blindly follow the BP recipe book” as it seeks tailored solutions for its assets.

    The firm will look to do that with the Rhum R3 well, an already drilled well which requires re-completion and remedial work.

    BP announced last year plans for a campaign at R3 which was then deferred in May following President Donald Trump’s decision to pull the US out of the Iran nuclear deal.

    Serica intends to move ahead with the project in the second quarter of this year and is looking at a new approach to carry out the work.

    Mr Flegg said: “We’re still committed to the R3 operation. It’s the re-entry of an old well.

    “We’re planning to do some preparation work on the well, physically go and cycle the valves and open the well up, probably for the first time in a number of years.

    “It will probably be early in the second quarter before we get round to that so there will be some activity on the well.

    “It’s a serious project, not the sort of thing you do with two months of preparation.

    “We are looking at re-engineering how that’s going to be done. We have all of BP’s plans and a lot of equipment that has been purchased ready to do that re-entry. But we’re not just going to blindly follow the BP recipe book, we’re looking at the most appropriate way of doing that for Serica.

    “It will be done to the upmost HSE standards but we need to be cost effective and look at the right way of doing it.”

  22. Aberdeen airport boss seeks to make business less focused on North Sea

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    The new boss of Aberdeen International Airport (AIA) aims to woo airlines with the Granite City’s “new proposition”.

    Steve Szalay took over as managing director at the terminal in November, filling the vacancy created by Carol Benzie’s departure at the end of July.

    In his first major interview since taking the helm, he said he was excited by the opportunities facing AIA after a turbulent few years.

    Mr Szalay, a former Army fofficer who has worked in the aviation industry at London’s Heathrow and Gatwick airports, and then as ground operations director for airline Jet2.com, said: “I had never been in Aberdeen before, and got a really pleasant surprise.

    “The city has never really been seen as a tourism destination and trying to change that perception is a real challenge.

    “But when you actually see what the region’s got, as well as all the effort that is going into promoting the area, you can see the opportunities.”

    For airlines looking at new routes, the attractiveness of Aberdeen in 2019 is “fundamentally different” than a few years ago amid the oil and gas downturn, he said.

    He added: “We will be going in there with a much stronger narrative.

    “The AWPR (Aberdeen Western Peripheral Route), Teca (The Conference Centre Aberdeen), cruises – these are real and tangible mega projects that will increase footfall.”

    He said he was keen to change perceptions of AIA as a business airport and add more leisure routes.

    One of the challenges is to help get across the attractions of Aberdeen and the wider north-east to a larger audience, he said, adding: “Before I came here I imagined the place would be full of petrochemical plants. It’s not like that at all.

    “I am not going to underestimate the challenge for the airport – these past few years have been tough – but I am optimistic.”

    Making the business less dependant on the North Sea is all part of the plan.

    Mr Szalay said: “We need to make sure that if the oil and gas industry catches a cold, we don’t catch an even bigger cold.”

  23. Tech and the climate agenda – two key themes from Davos 2019

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    Technology is finally high on the CEO agenda at Davos. This year’s theme, Globalization 4.0., was heavily peppered with conversations about digital technology and how it’s currently reshaping major multinationals’ operating models. In such a world, the supply chain has to reshape business models to survive, then flourish.

    In a short space of time there has been a paradigm shift. As recently as five years ago tech was stuck in the realm of engineers, and not a concern for the overall organisation. But in 2016 the World Economic Forum’s Annual Meeting focused on the fourth industrial revolution, something that has underpinned all subsequent meetings.

    Purpose-Driven Tech

    Artificial Intelligence (AI) was one of the most discussed themes this year, with more sessions on AI than any other topic. Discussions ranged from job displacement to the increasingly complex conversation around AI ethics. There is still a dystopian narrative that needs to be dispelled. 49% of CEOs polled during the annual meeting thought AI would displace more jobs than it will create.

    The evidence is far more positive. Countries such as Germany with the highest concentration of robots in the workforce, also have the highest rates of employment. Staff retention for repetitive, manual processes is consistently low with an obvious impact on productivity.

    The marriage of man and machine in the workplace will only serve to release people from repetitive tasks and processes to focus on what humans do best – creative thinking. In this – we are unmatched by any machine.

    AI has been improving our lives since the 1950s, and contrary to popular belief, I passionately believe that it will continue to do so in ever more meaningful ways. I’ll worry a lot less when AI helps vehicles on the road drive as safely as possible.

    When it comes to the future of work and employability, we need to adjust our thinking. It’s more likely that future generations will have two or three different career paths in their lifetimes as they adapt to the changing landscape. This cultural change will seem less daunting to the next generation. I am particularly interested by changes to our approach to education with open education initiatives such as EdX signalling an important commitment to lifelong learning.

    There was an interesting debate at the meeting across many forums, around a reality that will change the narrative for technology. Purpose. Breakthroughs in recent years have proven how technology developers have become strategic in the pursuit of sustainability objectives.

    Disruptive technology without the pursuit of a true purpose has led to many a planet-wide fiasco over the past decade. The misuse of the Copula formula in financial risk management and the unintended consequences of social media are but two examples. But true purpose-driven tech development? That’s something really powerful. And mitigating the effects of climate change is arguably the most important purpose of our time.

    The Energy Transition

    Following on from the direction that was set at the 2016 Annual Meeting, climate change was unsurprisingly a dominating theme again this year. Purpose-driven tech development has taken us to a position where the energy transition is a reality. The tools we need either exist, or are in development. One of the critical challenges is to make sure that scale-up is achievable. The complex network of technology needed to usher the transition to low carbon sources needs to be capable of scaling-up to align with the planet’s needs. One of the most prominent examples of this is large-scale and long-term energy storage. While sources like bioenergy, hydropower and onshore wind cannot easily be scaled up to mega-scale power generation.

    In terms of design and physical size, wind turbine blades (weighing up to 30 tons each – the same as a humpback whale) have been developed with technology that’s often decades old. The weight is an important factor in driving up the cost of the asset, and in turn the cost to consumers.

    Compare this to an optimized asset like a F35 fighter jet, which is two and a half times lighter than one blade. The defining difference? The F35 is an example of non-incremental development. When scaled up, wind turbines encounter additional costs which will be a barrier to their optimisation. We still need new technology to bring offshore wind down from the current 8c/kWh LCOE (Levelized Cost of Electricity) which is viewed as realistic today.

    This highlights the need for proper governance. Capital, policy and regulation to support the further development of clean energy technologies and their mass deployment. Trade systems need to account for externalities and governments need to make sure that these kind of frameworks are replicated on a global scale. All of which were big topics in Davos this year.

    The World Economic Forum talks about Sprint 2020. The objective is to achieve immediate action on sustainable development whilst also tackling the climate agenda. We will only make serious progress if the business community, civil society, academia and government make it a priority in board level discussions.

    New technology is critical to our collective success. I wonder how your organisation can help to deliver innovative solutions in the next two years?

  24. ‘Battle for data ownership’ must be avoided, EY finance expert says

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    Oil companies must put their heads together to prevent a “battle for data ownership” erupting, a corporate finance expert said today.

    Celine Delacroix, associate partner, head of oilfield services EMEIA, said contractors and large operators alike are developing their digital offerings to control data.

    Ms Delacroix said: “There are a lot of questions about the future of operators and contractors.

    “How are they going to collaborate so that operators and contractors do not reinvent the wheel and create their own systems separate from each other?

    “In some ways there is a battle for data ownership, for control of various different systems and technology which contractors want to develop and operators want to control, as well.

    “There needs to be collaboration between both sides to help contractors develop technology to make efficiencies.”

    A push to share data more openly is in full swing in the UK North Sea.

    The Oil and Gas Authority is working on the launch of the UK’s first offshore Oil and Gas National Data Repository, which will be accessible to all offshore petroleum licensees and owner-operators of offshore infrastructure.

    The regulator has also made large volumes of seismic data available to stimulate exploration.

    Ms Delacroix was speaking at the launch event for EY’s annual review of oilfield services, which showed a third straight year of turnover decline.

    She is doing a lot of work on mergers and acquisitions, but equally, is still kept busy by company restructuring jobs.

    The market is looking better for oilfield services, but challenges still exist around collaboration.

    “The recovery is going to be slow and a long journey towards increased profits,” she warned.

    She said revenues started to nudge up in 2018, with drilling companies displaying increased profits as jack-up rates rose.

    She expects the momentum on profit margins to start rubbing off on UK companies.

  25. UK export champions on show at Subsea Expo

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    Businesses in Aberdeen received a boost as the Department for International Trade dished out support and advice at Subsea Expo.

    DIT’s Export Hub, which is part of the UK Government’s ‘Exporting is GREAT’ campaign, showcased export champions from across the UK.

    Global trade experts from DIT were on hand to provide businesses with advice on exporting and insight into subsea business opportunities.

    The UK is seen as the global partner of choice in the subsea and oil and gas industries.

    Britain’s subsea sector is worth £7.5 billion, with over 45,000 employees and around 650 companies.

    While oil and gas accounts for the major share of subsea revenues, the sector also operates in oceanology and machine renewables.

    John Mahon, director general for exports, said: “Subsea Expo is a fantastic opportunity for businesses to connect with other members from the industry and find out what support is available from the UK Government.

    “Through its work with trade associations such as Subsea UK, DIT has helped companies achieve business worth nearly £9 billion in the oil and gas sector in the last year alone.

    “With £3 billion UK Export Finance help available for exporters, there has never been a better time to consider entering the global marketplace.”

    Campbell Keir, deputy director, energy and infrastructure at DIT, said: “We work closely with organisations such as Subsea UK to bring exporting opportunities to UK companies and also provide support for businesses to enter new markets such as Nigeria, Mozambique, Azerbaijan, Brazil and Mexico.

    “I am delighted to welcome so many UK businesses to the Subsea Expo this year, and would encourage businesses to contact my oil and gas team at DIT if they would like to learn more.”

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