Alex Kemp


What can we expect for North Sea oil sector in 2019?


The year 2018 exhibited several major changes to the operating environment for the North Sea oil industry.  The dramatic fluctuation in oil prices was an obvious and key feature.  Starting at around $60 in January the Brent price climbed to a peak of around $85 in late October and then fell dramatically to below $60 at the time of writing.  The increase was fostered by threats of severe sanctions against Iran by the US Government plus continued stagnation of production in Venezuela.  The subsequent granting of many waivers to the sanctions plus evidence of continued growth in US production and signs of weakening world demand growth produced the dramatic fall in recent weeks.  The announcement of production cuts of 1.2 million barrels per day by OPEC and collaborating countries, particularly Russia, produced only a minor increase in the price.  The future outlook is very unclear.  For example, sanctions on Iran could be tightened at some future date.


Opinion: Kemp – Mergers and asset transactions on the rise in oil and gas sector


Over the last year or so there has been increased activity in mergers and asset transactions in the oil and gas sector. This certainly includes the UK Continental Shelf. With respect to asset transactions, in the immediate aftermath of the oil price collapse, there was little activity. Both potential sellers and buyers had to assess the effects of the price fall on the value of assets. Cost reductions and valuation of their effects were a priority. Also, there was great uncertainty regarding future price behaviour which made agreement valuations more difficult.