A substantial number from Aberdeen’s oil and gas community are this week on the other side of the Atlantic as OTC kicks off in Houston and never has there been a more important time for those involved in the energy sector to be banging the drum for the UK oil and gas industry.
OTC is a coming together of delegates from more than 120 countries, to exchange ideas, opinions and to advance scientific and technical knowledge for offshore resources and their sustainable development.
As part of a five-strong Pinsent Masons team, who have been visiting OTC for more than 20 years, in addition to more regular visits to Houston, we will be making the case to international delegates that the North Sea is open for business, hungry to do deals, and keen to protect our position as the foremost developers of new technologies which enhance hydrocarbon recoveries and improve safety.
OTC delegates will be coming to terms with what is now largely accepted as a ‘lower for longer’ if not ‘lower forever’ price of Brent crude, but there are encouraging signs that the oil and gas downturn appears to be levelling out.
However, we have to pay heed to anecdotal evidence which suggests there is a squeeze on the capacity of the vital supply chain which gets the oil and gas out of the ground. It is comforting that major operators and contractors have made great strides in redefining how they can collaborate to benefit all, but some attending OTC will stress the need to strike a balance which ensures the value is shared appropriately.
With a supply chain that finds itself struggling to survive, the industry will not reap the benefits of breakthroughs in new technologies and better practices which have negated, to some extent, the fall-out from the oil price slump.
With many mega billion-dollar projects now closed out and others on the backburner for the foreseeable future, discussion will revolve around the need to bring through other strategic developments, or risk a potential situation where in a couple of years we can’t meet global demand for oil and gas. We will be looking to hear more on smaller-scale projects heading to the planning and development stage, which are right-sized for the economic environment we now live in, and which foster safe and efficient development and operations.
Our colleagues in Pinsent Masons’ Beijing office last week welcomed a delegation from the Scottish Chambers of Commerce on a mission to strengthen links with lucrative Chinese markets. We will be doing our part in Houston this week to push the case with our Chinese counterparts and other global producers, that post-Brexit, the UKCS will remain a basin worth investing in.
Bob Ruddiman is head of energy at legal firm Pinsent Masons