First Minister Nicola Sturgeon has been urged to reveal the Scottish Government’s assessment of the tax cut needed to save the jobs of thousands of oil workers. Scottish Labour leader Jim Murphy said the move was necessary given the “crisis” currently unfolding in the sector due to the dramatic fall in the price of a barrel of oil, which is currently less than $60. It comes as renowned economist Prof Ronald MacDonald, of Glasgow University, said a fall to below $40 a barrel was “not unreasonable”.
The UK Government moves like lightning to tax the industry when oil prices are high but moves at a snail’s pace when oil prices are low. In a glaring example of oil tax hypocrisy, George Osborne announced a shale oil fund for the north of England in his Autumn Statement. This is before a single barrel of oil has been produced, yet, Scotland, with more than 40 billion barrels of oil is still waiting.
Government staff from the Department of Energy and Climate Change have been urged not to say Merry Christmas, it has been claimed. According to reports government staff in the department – which has offices in both London and Aberdeen – were given the advice to avoid offending people of other faiths. However a spokeswoman said there had only been an informal discussion between a couple of staff members.
Oil workers could be offered incentives to ditch the commute and move closer to the city in a bid to meet green targets.
A north-east firm has been awarded a two-year contract extension for the provision of specialist contractors with Shell UK. Aberdeen-based firm CSL has been awarded the extension of an existing onshore and offshore frame agreement with the oil giant across its Upstream International Europe region for the provision of client representation. The contract covers provision of experienced senior client, diving, marine and engineering representatives to support subsea teams.
The European Court of Justice has ruled obesity can constitute a disability. The EU’s highest court was asked to rule on the case of a male childminder in Denmark who said he was sacked for being too fat. Legal experts had warned that the move would offer crucial protection to offshore workers who fall foul of new helicopter safety legislation limiting the size of people travelling to North Sea platforms. The court said that if obesity could hinder “full and effective participation” at work then it could count as a disability.
International Tubular Services (ITS) has become the second Scottish business to self-report having benefited from a potentially corrupt payment, and reach a civil settlement which sees them paying over a substantial sum to the Civil Recovery Unit. My advice to other Scottish firms with bribery and corruption “skeletons” would be to come clean now to reduce the risk of being subject to a criminal investigation and more significant penalties after a self-reporting deadline expires next June. Aberdeen-based ITS admitted it had benefitted from a profit of £172,200 as a result of a corrupt payment made by a former Kazakhstan-based employee to secure additional contractual work in the former Soviet republic.
BLOBA Glasgow aluminium company owned by the former owner of Rangers Football Club said its systems had been successfully installed an accommodation module to be used on successfully installed on the BP Clair Ridge project. Bellshill-based Alphastrut, owned by Sir David Murray’s private investment firm, said its decking has saved BP around 54 tonnes in weight following the completion the seven figure installation deal.
Well management firm Exceed has set its sights on international markets after reaching its target turnover of £15million this year. The Aberdeen company is currently planning the first deepwater campaign in Myanmar, expected to commence in early 2015. The firm has added 10 new staff in Aberdeen this year, adding to its workforce of 75 in Canada, Ghana, Kenya, Myanmar and Malaysia.
ABIS Projects has won a number of contracts worth around £1million. The oil and gas services consultancy said it has secured frame agreement and call-off contracts with companies including Talisman Sinopec and North Sea newcomer, MOL Group. Francis Kiernan, who acquired an interest in ABIS Project earlier this year, spoke to Energy Voice about the contract wins. With more than 30 years in the oil and gas industry, Mr Kiernan forecast opportunities for the UK in the Norwegian sector.
Local councils can get blamed for a lot of things, sometimes with good reason, but also unfairly from time to time. Clearly, the price of oil and the operational decisions of major energy firms fall well outwith the remit of elected representatives at the town house. However, there are two key areas in which the industry has made it clear that Europe’s oil capital needs improvement.
A search is underway for a new chairman at Asco Group following the surprise departure of both the oilfield services firm’s chief executive and chairman. The Aberdeen-based company remained tight-lipped last night over the details of why chief executive Derek Smith and chairman Billy Allan were exiting the business. It said that Mr Smith was leaving to “pursue other opportunities”, while Mr Allan had “indicated his intention to step down”, but made no further comment.
Wow ...12,000 new entrants to join offshore oil and gas industry in next five years headlines the industry report. Brill! But, over the same period, around 9% of the current workforce, for long said to be around 450,000 but now discovered to be 375,000 will disappear. I’m curious about the apparently sudden drop from 450,000 to 375,000 direct and induced. It doesn't seem to be explained. That’s a heck of a reduction and begs the question as to the accuracy of the old overall workforce number. I have to assume that the methodology that generated the 450,000 figure a decade or so ago was as rigorous as the one that EY has applied for this latest study.
Oil and gas services firm Can Group has recorded a boost in turnover and pre-tax profits for the year ending December 2013. The Aberdeen-headquartered firm, which provides engineering, inspection and trade services to the oil and gas sector, posted a 20% increase in pre-tax profits to £18.5million, from £15.4million previously.
For over 20 years I have analysed oil price fluctuations. Why? Well, every country’s economic prospects and people’s jobs, yours and mine, are affected in one way or another by what happens to oil prices. Life and death decisions, including continuing national sovereignty for some nations, hinge on the price of oil. The current dramatic and fast 35% fall in oil price could be a pivotal moment in historical events. For example, will the oil revenue dependent Russian economy survive if oil prices stay at around $70 a barrel? If not, what action will Russia take?
Offshore industry chiefs have urged the UK Government to speed up measures to support the sector after coalition ministers unveiled radical plans to reward North Sea investment. Tax regime changes aimed at making sure as much oil and gas as possible is extracted have been welcomed by operators. But they want them implemented sooner rather than later because of the challenges posed by low crude prices and high exploration costs. Highland MP and Chief Secretary to the Treasury Danny Alexander, and Exchequer Secretary to the Treasury Priti Patel, were both in Aberdeen yesterday to present their department’s financial review of the sector.
In the Autumn Statement, the UK Government announced a number of measures aimed at increasing the competitiveness of the UK Continental Shelf. This included a 2% reduction in the Supplementary Charge to Corporation Tax, new tax allowances to encourage development of complex fields as well as enhanced tax measures for the exploration phase. But this was the curtain raiser to the main event in Aberdeen, where the Chief Secretary to the Treasury, Danny Alexander MP, presented a more detailed roadmap for the future fiscal approach to the UK oil and gas tax regime.
It looks as if the UK Treasury has a fiscal plan that might work for the UK Continental Shelf and the industry appears broadly receptive. But there were multiple warnings issued to Treasury chief secretary Danny Alexander in Aberdeen that time is running out and that he must deliver concrete measures by the Government’s Spring Budget. Indeed, this urgency is made all the more acute by the revelations that Opec swing producer Saudi Arabia is now apparently content to let the oil price drop to around $60 a barrel and that it be a long, rough ride for everyone. The gathering of industry leaders and media at Oil & Gas UK’s offices to listen to Alexander and Tory colleague Priti Patel (exchequer secretary) was large.
CHC Helicopter is set to invest millions of pounds to transform its facilities in Aberdeen. The company plans to deliver the expansion of its hangar capacity, passenger terminal and provide for a new operations centre. The development will be delivered in two phases.
Offshore firms will be offered new tax breaks today to trigger a fresh wave of North Sea exploration, it can be revealed. Energy Voice has learned that Chief Treasury Secretary Danny Alexander will reveal plans to try to end the UK's exploration crisis through a system of tax credits for seismic surveys. The move is expected to be welcomed by industry leaders who have repeatedly called for extra incentives to stimulate flagging exploration rates.
Work is under way on UK North Sea headquarters for Norwegian oil firm Statoil at the Prime Four business park in Kingswells, Aberdeen.
We watched yesterday's Autumn Statement from the Chancellor George Osborne, with feelings of hope and trepidation. We understand the economic constraints under which today’s Autumn Statement is delivered and there’s consensus in our offices this afternoon that the immediate reduction of two percentage points in its tax rate is an important first step towards improving the fiscal competitiveness of the UK North Sea – but, without question, more needs to be done.
The decline in oil prices could have a substantial adverse effect on the oil and gas industry in the UKCS (UK continental shelf) a leading industry expert has warned. Research by Professor Alex Kemp and Linda Stephen from the Aberdeen University has found that if the current drop in price continues, there will be reduced investment and production. Using economic modelling, the pair highlighted two scenarios which reflect investment screening prices.
Maven Capital Partners has sold its stake in an Aberdeen firm it backed in a £10million deal five years ago. A group of private investors has bought out Maven's stake in oil and gas control systems firm, EFC Group. The sum was undisclosed but Maven said it generated a 3.8x multiple return for its client funds on the deal.
Fletcher Shipping has added a new platform supply vessel (PSV) to its fleet. The FS Cygnus was named by Karen Fletcher at Flekkefjord in Norway. It is the first new build for the Fletcher fleet and is one of two sister ships being built by Norwegian shipyard Simek.