The UK’s oil industry is “close to collapse” but the falling oil price could have a net benefit to the UK economy, according to experts. Robin Allan, chairman of the independent explorers’ association Brindex, said it is “almost impossible to make money” with the oil price below 60 US dollars (£38) a barrel and there will be no new investments. But accountants PricewaterhouseCoopers (PwC) said the falling oil price “should be a net benefit to our economy as a whole, even if there is some losers in the UK oil and gas sector and in particular places like Aberdeen”.
Subsea 7 will be making changes to its organisational structure by switching to two global units. The company said the move will be made to strengthen its capabilities and competiveness. A Northern Hemisphere and Life of Field Business unit will comprise the UK and Canada region, Norway and the Gulf of Mexico. The life of field and I-Tech division will be managed globally.
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.
The decision by Wood Group PSN to chop the rates paid to its limited company offshore and onshore contract workers and freeze the pay of most onshore employees here in the UK comes as no surprise. Wood Group PSN is right to take a stand, especially on the issue of independent contractors, given the rates that they have been able to command over the past decade or so. OK, this is the second reduction that the group has sought to impose on the so-called IR35 brigade, bringing the total cut announced this year to approaching 20% for some.
The UK Government must bring forward changes to the way the oil and gas industry is taxed by March or there will be “extremely serious repercussions“ for the sector, Energy Minister Fergus Ewing has warned. Danny Alexander, the Chief Secretary to the Treasury, said earlier this month that UK ministers would consult on several new approaches to taxation. The reforms would lower the tax burden on the industry, which has been hit by recent falls in crude oil prices.
An advisory group has been established to help the Government address Scotland’s failure to equip young people for work. Sir Ian Wood will be a founding member of the Scottish Government’s Developing the Young Workforce National Advisory Group. The oil magnate chaired the Commission for Developing Scotland’s Young Workforce, which found Scotland is “simply not preparing or equipping young people for the world of work”.
The DECC (Department for Energy and Climate Change) has made £2.5million cash pot available to encourage the development of CO2 storage in the North Sea. The money will help companies to identify the next phase of sites under the sea to store C02 emissions from coal and gas power stations as well as heavy industry such as steel and cement factories. The DECC will provide the cash from its Innovation Fund, and it will be delivered by the ETI (Energy Technologies Institute).
Atlantic Petroleum said it has reduced its capital expenditure for exploration next year by 75% on the back of lower oil prices. The company has budgeted up to DKK 30million for its near-term exploration activities. It expects operating expenditures of around DKK 175million for the full year 2015. Chief executive, Ben Arabo, said: “We are adapting to the market situation and are cutting costs in 2015 where we can.
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.
Norwegian investment firm HitecVision has consolidated five companies in its portfolio into one oil and gas services firm. The firm’s Global Maritime Group, which has offices in Aberdeen, Glasgow and London, will now comprise Marine Contracting, Deep Sea Installation, Vryhof Anchor and Deep Sea Mooring. The five companies specialise in offshore and maritime engineering, marine warranty, dynamic positioning, vessel inspection, mooring and anchors, as well as offloading, transportation and installation of offshore structures.
Prime Minister David Cameron has defended plans to give new tax breaks to North Sea oil and gas firms - describing the industry as "valuable and vital". The UK Government announced a series of measures in this month's Autumn Statement to boost the offshore sector as it struggles to cope with falling prices and rising costs. Mr Cameron, the Conservative leader, was questioned at yesterday's liaison committee about how the tax cuts squared with the government's environmental targets.
Statoil and its partners have decided to develop the Rutil discovery in the Gullfaks Rimfaks valley in the North Sea. The company said it could provide close to 80 million barrels of oil equivalent and extend the lifetime of the Gulfaks A platform. Investment costs involved with the project are estimate to be around $610million.
The problem with the UK’s North Sea oil sector is that its production costs are higher than those in most other world regions and have been spiralling upwards at an alarming rate for the past 10 years.
Amec Foster Wheeler has been awarded a FEED (Front End Engineering Design) contract by Chevron to work on its Captain EOR (Enhanced Oil Recovery) development in the North Sea. The newly merged company said the contract award has not yet been announced for the work on the field, which is 68 miles offshore north of Aberdeen. The scope of the work includes FEED design of the proposed Bridge Linked Platform (BLP) which will be used to store, mix and pump polymer.
Aker Solutions has secured a £120million contract for work on the Mariner oilfield development in the UK North Sea. The agreement will see the company provide engineering, construction and commissioning services during the development’s hook-up phase. Aker will carry out the work on behalf of Daewoo Shipbuilding and Marine Engineering on the development. The deal comes in addition to a five-year maintenance and modification service contract awarded by Statoil in June.
Workers are being evacuated from a North Sea platform as a precaution after a boat which caught fire began drifting towards its vicinity. The Norwegian vessel caught on fire 14 miles away from the Lomond rig. The blaze has since been put out and the crew are safe, but the boat is currently drifting due to unstable weather.
Operators could make up to £15billion in savings with more effective and cohesive project decisions, according to a new report. Human resource specialists PwC said reducing over runs, streamlining the supply chain and improving collaboration could allow lower costs. The latest report in the company’s Northern Lights series said operators have the power to effect change in both attitudes and approaches. Falling oil prices and higher costs means that it is “crunch time” for the industry.
The North Sea has been producing oil and gas for half century next year and the challenges the region faces are well documented. The ‘Fuelling the Next Generation’ report released this week showed the scale of the skills shortage is much less apparent than it was 12 to 18 months ago. This means that all the work the industry has been doing from grassroots level in schools right through to engaging with potential transitioners and the wider public is working. The study, commissioned by Oil & Gas UK, OPITO and the department for Business, Innovation and Skills, has delivered the truest reflection of how life is going to look for those of us in the sector over the next five years.
Talisman Sinopec has started transferring workers back to a North Sea platform after it was evacuated ahead of a severe winter storm. Staff had been taken from the installation back to Aberdeen. A spokeswoman said 33 staff were making their way back to the platform, although production has not yet resumed.
An offshore helicopter was forced to return back to shore after a passenger became unwell. The Bond S-92 was heading to the Balmoral Platform when an emergency call was issue around 9am. A spokeswoman for Bond confirmed the helicopter was diverted.
We at Oil & Gas UK recognise that there will be changes in employment patterns, and these will affect employment across the sector. It is worth pointing out the 9% decline in employment will be across the UK - not just Aberdeen or Scotland. The forecast reduction in oil and gas industry jobs comes from an anticipated decline in capital expenditure over the next five years.
Repsol SA (REP) has revived talks with Talisman Energy Inc (TLM), people with knowledge of the matter said, as the Spanish company seeks acquisitions to bolster its presence in North America even while oil prices tumble to five-year lows. Repsol and Calgary-based Talisman are discussing options that could include the sale of some assets or the whole company, the people said, asking not to be identified because the deliberations are private. Talisman’s plunging valuation -- now at C$4.5 billion ($3.9 billion) after falling about 60 percent since the end of August -- remains a hurdle to any deal, the people said. Talisman said in a statement it has been approached by a number of parties including Repsol about “various transactions.”