Long-standing UK North Sea trade union leader, Jake Molloy of the RMT, is warning bosses against sacrificing the workforce or compromising safety in their re-found zeal to slash costs in the face of collapsed oil prices coupled with a fiscal regime judged unfit for purpose.
He accuses managers of not learning from the past, being short-sighted, of destroying hard-won trust among the workforce and warns that offshore safety will be compromised.
Not only that, such actions will cost the industry dear in financial terms.
BG Group said it had written down the value of its business by nearly $6billion amidst the drop in oil prices.
The company has reduced its 2015 investment budget by around 30%.
It is looking to reduce it operational expenditure by 10%m, which includes jobs.
Talisman Sinopec has informed workers it proposes to move to a new three weeks on, three weeks off (3/3) rota.
The company has become the latest North Sea operator to warn offshore workers they could face the change to their shift patterns.
As reported by Energy Voice, Apache last week confirmed it planned to make the change to shift patterns from April.
Chancellor George Osborne was yesterday warned that the upcoming Budget represents “a final chance” to reduce and simplify the tax burden on North Sea operations.
Malcolm Webb, chief executive of industry body Oil and Gas UK, told delegates at a summit in Aberdeen that the struggling offshore sector is headed towards a “cliff edge” in terms of investment.
Mr Webb argued that the UK Continental Shelf (UKCS) remains a “major resource” and it would a “national disgrace” not to explore and produce the remaining oil, whether forecasts are for 16, 20 or 24million barrels.
A late rally led by energy companies pushed US stock indexes higher yesterday after the market flitted between small gains and losses for most of the day.
Stocks opened higher, then moved down, then back up as investors seemed unable to make up their minds. A pair of weak reports on the US economy fed the uncertainty.
But oil prices ended up surging for a third straight day, and stocks of big producers jumped. All 10 industry sectors in the Standard and Poor’s 500 index rose.
Exxon Mobil rose 2.5% after reporting better-than-expected earnings. Chevron jumped 3.4%. Both companies are members of the Dow Jones industrial average.
BP is to cut investment for this year by a fifth or as much as six billion US dollars (£4 billion) as it adjusts to the “new reality” of lower oil prices, boss Bob Dudley said today.
His stark message came as the group slumped to a 969 million dollar (£645 million) replacement cost loss for the fourth quarter, down from a profit of 1.51 billion US dollars for the same period in 2014.
BP recorded a $3.6 billion dollar hit including write-downs on assets in the North Sea and Angola and on the falling oil price.
Its results came as oil and has exploration firm BG Group - originally a spin-off from the privatisation of British Gas - also slashed capital expenditure plans for 2015, by $6-7 billion.
Falklands oil explorers will start their 2015 drilling campaign in March, shaking off concerns about low crude prices and sending their shares higher.
Drilling for oil and gas in the resource-rich Falklands area by London-listed companies remains controversial as a decades-long row between the UK and Argentina over the sovereignty of the islands has not been resolved.
Rockhopper and Falkland Oil and Gas said yesterday their shared drilling rig was being moved from west Africa to start work in the first week of March.
I suppose given that I’ve written previously about so many similar instances I really shouldn’t have been surprised when I read that an organisation called “Social Investment Scotland” was doing a deal to help fund a developer of low carbon projects install an Australian-developed micro combined heat and power unit (MCHP) on initially seventy but potentially up to three hundred and fifty properties across Scotland with a view to helping residents reduce their fuel bills.
The company producing the MCHP is Ceramic Fuel Cells Ltd and according to their website they were spun out of the Australian Government's Commonwealth Scientific & Industrial Research Organisation (CSIRO), their corporate head office and research and development facilities are in Melbourne and they have a fuel cell assembly plant in Heinsberg, Germany, and a ceramic powder plant in Bromborough in the UK.
So perhaps not surprised but just downright gobsmacked that once again we have let an international competitor steal a march on us in an important area of technology.
It’s perhaps even more frustrating because I know that at least two of our universities have specific recognised expertise in fuel cell technology. In fact, a few years ago one tried to commercialise a ceramic fuel cell but as is often the case in Scotland, couldn’t get together the funding.
The UK’s new oil regulator is looking for ideas on how to boost exploration for new fields from Norway where firms that have received tax breaks have made a number of profitable discoveries.
Exploration in the UK continental shelf “fell off a cliff” when the UK Government hiked up taxes to 62%, industry body Oil & Gas UK complained at an industry summit in Aberdeen.
Andy Samuel, chief executive of the new Oil & Gas Authority (OGA), said it is looking to understand why exploration has continued apace in Norway while the UK has struggled.
Shell will shortly be seeking final approval to begin decommissioning the Brent oil and gas field.
The energy giant is proposing to lift the 23,500-tonne top section of the Brent Delta platform in the first stage of the process.
The Brent field, north east of the Shetland Islands, has produced about 10% of all UK North Sea oil and gas since production began in 1976.
Its four platforms and their related infrastructure are the subject of a planned decommissioning programme over the coming decade.
A 30-day public consultation on Shell’s plans to start the process will begin on Monday February 16.
Growth in Britain’s manufacturing sector ticked up at the start of the year as firms’ costs were eased by plunging oil prices, but it remains “stuck in a low gear”, figures showed today.
The sector posted a better-than-expected reading of 53 on the closely-watched CIPS/Markit purchasing managers’ index survey for January - where 50 separates growth from contraction. It was up from 52.7 in December.
Firms were aided by the slump in oil prices which fed through to the steepest drop in input costs for nearly six years and they also cut their selling prices for only the second time during the past five years.
The UK should continue to look for onshore unconventional gas supplies to meet the country’s future energy demand, according to an oil and gas industry body.
Fossil fuels account for around two-thirds of the UK’s energy consumption, particularly in homes and transport, and domestic production must continue to avoid future reliance on costly imports, according to Oil & Gas UK.
The boom in unconventional gas released through “fracking” in the US has driven down oil prices and plunged the UK North Sea oil sector into crisis, prompting city leaders in Aberdeen to hold an emergency summit of politicians, industry representatives and unions today.
Want to buy an oil well in UK’s North Sea? There are plenty available as some of the industry’s largest names try to sell aging, costly wells that have become even less profitable with the plunge in crude prices.
BG Group Plc, Apache Corp. and Marathon Oil Corp. are among companies that have explored a sale of their North Sea assets, according to people familiar with the processes.
In all, assets worth as much as $30 billion are currently for sale in the North Sea, said Dave Blackwood, senior adviser to investment bank Evercore Partners Inc.
Aberdeen’s council leader will today call for the UK and Scottish governments to “seize the moment” and back plans for a £2billion investment in the north-east.
Jenny Laing will use a North Sea oil summit to argue for a radical transformation of the area through spending on transport, housing and skills development to help secure the long-term future of the industry.
The city council administration believes the level of attention currently focused on the energy sector, due to the dramatic fall in the price of Brent Crude, provides a “historic opportunity” for the region.
New figures have shown that optimism among oil and gas companies fell dramatically at the end of last year in a continuation of a downward trend in the sector.
Industry body Oil and Gas UK’s business sentiment index, which is published today, has shown a drop of 16 points to -23 on a -50/+50 scale.
The overall index has slumped further into negative territory for the second quarter in a row amid a plunging oil price and lay-offs at several North Sea firms.
Dubai stocks advanced the most in six weeks after oil rallied on signs a price slump will curb output.
Saudi Arabia’s benchmark index rose after King Salman ordered bonuses of two months’ salary to be paid to government workers.
The DFM General Index added 4.5%, the most since December 21, to close at 3,840.22. Abu Dhabi’s ADX General Index climbed 2.2%, its first increase in five days, and Qatar’s QE Index gained 1.4%, the strongest close since January 8.
There are too few women entering, staying in and reaching the highest levels of the energy industry, a new report says.
Professional services firm PwC and industry body POWERful Women (PfW) reveal research findings showing just 5% of executive boards seats among the top 100 UK-headquartered energy firms are held by women.
More than three in five of the firms (61%) have no women on their boards at all.
The United Steelworkers union, which represents employees at more than 200 US oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980.
The USW started the work stoppage after failing to reach agreement on a labor contract that expired Sunday, saying in a statement that it “had no choice.”
The union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies including Exxon Mobil Corp. and Chevron Corp. since negotiations began on January 21.
Chevron Corp is slowing spending on the Kitimat liquefied natural gas project on Canada’s Pacific Coast amid a crash in oil prices and competition from new projects worldwide.
The San Ramon, California-based producer is also delaying all final investment decisions except for its Tengiz field in Kazakhstan, Chief Executive Officer John Watson said on a conference call on Friday. He did not elaborate on the slowing of investment in Canada.
A group of MPs has claimed that the North Sea industry is using the oil price slump as an “opportunity” to cancel projects, sack workers and shelve maintenance work.
A motion has been tabled at Westminster and signed by 16 MPs saying that they are “dismayed” by the actions of some employers since the price plummeted.
Industry body Oil and Gas UK has written to Alex Cunningham, the Labour member for Stockton North who lodged the motion, to deny that the sector is taking “short-term responses”.
Scottish Government plans to manage and protect Scotland’s seas are not yet “fit for purpose”, according to a Holyrood committee.
The draft National Marine Plan for Scotland has been developed over five years and was published last month.
It aims to balance the development of established industries such as oil, gas and fishing with emerging sectors such as marine renewables and carbon capture and storage.
Atlantic Petroleum has announced it will relocate its finance function to Bergen and close its Torshavn in Norway.
The company said its current chief financial officer, Mourits Joensen, will leave the company with immediate effect.
Nigel Thorpe, currently business development director, will become interim chief financial officer.
Electromagnetic Geoservices ASA (EMGS) has entered into a data licensing agreement with an oil company for the provision of 3D EM data worth $2.5million.
The agreement is related to the 23rd licensing round in the Barents Sea.
Chevron has reduced its capex by 13% with plans to spend $35billion this year on oil and gas projects.
The company plans to spend the bulk of that amount on projects in Australia, Argentina and Kazakhstan.
The oil major said it would still be focused on investments in shale formations including one of its major plays in the oil-rich shale Permian formation in Texas.
A moratorium on new leases for oil and gas developments in parks and forests has been reinstated in Pennsylvania.
Governor Tom Wolf said the moratorium was about “striking the right balance” between development and environment.
The executive order move was made after Pennsylvania’s Department of Conservation and Natural Resources (DCNR) has concluded that additional leasing could jeopardise the ability to maintain gold-standard forest certification.
