North Sea oil and gas companies must avoid reverting to bad old habits now that Brent crude is back above $50 a barrel, the industry regulator has warned.
The Oil and Gas Authority (OGA) claims to have heard of a return to “boom and bust” tactics after global supply cuts helped rally the price downturn.
The regulator claims that looking for a selfish quick buck would only bring a premature end to the mature basin without the full potential being realised.
Instead Gunther Newcombe, OGA operations director, said the time for talking about collaboration is over and that the prinicples first outlined in the Wood Review must now become a practical reality.
He said: “We are seeing improved collaboration in the industry and it is encouraging.
“But it’s slow and we are seeing opportunities lost. Everything moves to the right. It takes too long and value is being lost.
“Time and time again we have to go in and say ‘you’ve got two weeks or something else is going to happen’.
“There are some worrying signs now that oil is back above $50. We hear of people getting back into the old habits of the boom and bust cycle. We don’t want that.
“We want a steady business that can go on for another 30 or 40 years.”
He added: “Collaboration is incredibly important.”
To this end, Newcombe said, the OGA has implemented a number of new processes to encourage companies to use the framework that the regulator provides.
Yesterday, the watchdog launched its “collaborative behaviour quantification tool” (CBQT) which was trialed with Chevron – which described the process as “efficient and effective”.
And he said that collaboration assessments are especially important in joint ventures, where old competitiveness can breed “mistrust”.
Speaking to delegates at the Collaboration in Oil and Gas conference at the University of Aberdeen, Mr Newcombe unveiled the OGA’S “Vision 2035″.
The idea is to move towards the goal of realising the full UKCS hydrocarbon potential where the industry can also add £500billion of value over the next two decades.
This would be done primarily by increasing the UK supply chain turnover from capturing larger shares of exports markets, such as decomissioning.
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