Opportunity is being created for contractors in the North Sea and could be the “ideal time” to invest in new developments, according to a leading lawyer with expertise in exploration and production and oil and gas service firms.
Bruce Mcleod sat down in the Energy Voice newsroom to discuss the main challenges for companies looking to invest.
He said cash from existing operations has been “severely impacted” by the low oil price and said banks are often cautious about increasing their exposure to the sector.
Mcleod said: “Cash from existing operations has been severely impacted by the low oil price and banks are often cautious about increasing their exposure to the sector. But this is creating opportunity for many of the contractors.
“We’re seeing an increasing appetite amongst the larger contractors to invest their own capital in new field developments. From the contractors perspective this has a number of advantages.
“First, it can get their people and assets to work, but second, they can generate additional revenue from accepting incremental risk. This trend is in part an answer to the question of do E&P companies access capital and with the current low oil price, this trend is likely to continue.
“What we’re seeing is not contractors taking direct interests in the licences but in the fields themselves.”
Watch the full interview with Bruce above.