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Exclusive: Premier Oil says ‘We’re committed to our UK investment’

Premier Oil
Premier Oil has a stake in the huge Zama well

Premier Oil’s director of North Sea and Exploration said the independent operator was committed to its UK investment.

Speaking to Energy Voice about his recent appointment to Oil and Gas UK’s board, Robin Allan said: “We are committed to the our UK investment. For us the North Sea is just about as good a place as any to invest – obviously not as good as it used to be – but we believe we can still make money here.”

It comes as the North Sea operator is in talks with its creditors regarding its financial covenants. It is currently sitting on a net debt of $2.63billion.

Allan said the firm would update the market as soon as the talks conclude.

“There’s been progress, but these things always seem to take a long time to be concluded,” he said.

However, Allan’s confidence in the North Sea sector was resolute

He added: “We feel there is a great and long future ahead of us in the UK sector.”

It’s a confidence he will bring to OGUK in his new role.

The industry veteran, who has built-up decades of international geological and business development expertise, said the industry’s “wake-up call” needs to be followed-up by both sector and government action.

For the industry’s part, the task at hand has to be about more than just cost reduction, according to Allan.

“You hear people talking about going to a carbon-free future, all the while they drove to that conference and are enjoying the AC that is no doubt powered by gas or nuclear,” he said.

“I don’t think we have been very good as an industry as getting our message out there.”

A message, which includes explaining the sector’s importance in the future energy mix.

From a government standpoint, Allan said if the political leaders, regardless of party, want projects to go ahead than they need to help in a meaningful way by “being genuine in putting together a stable fiscal regime”.

Allan said: “Instead of saying, ‘What I did last year was good and I’m going to do that again and do it well’, you have to be seen like you’re tackling something else and then you have to add another regulation.”

The relentless tinkering has rendered an unpredictable back-drop for the sector, which now has to be un-picked, according to Allan.

“It’s not stable at all,” he said.

“In Indonesia we’ve had the same regime for the past 40 years. We don’t have that in the UK and it’s a pity.”

Allan suggested possible government guarantees for qualifying work.

But one of the most important influence in the sector’s recovery, isthe  emerging momentum from the sector to be and do better, according to the director.

Allan concluded: “People’s mind-sets have been changed. No one is assuming that oil is going to rebound the levels of where it was before and therefore there has been a deep-seeded shift in most companies. It goes beyond the freezes and redundancies. It just that we to do things differently.

“The luxuries and idle behaviors you saw at high oil are all out the window.”

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