The U.K.’s oil and gas industry has made great strides to improve its efficiency since the start of the downturn in commodity prices in 2014.
But, have we done enough to remain competitive with the world’s other major basins in oil and gas? And if not, what should we be doing to ensure we regain our place on the world stage?
I discussed the question of the industry’s future, and other issues, with Rebecca Buchan, business editor of the Press and Journal.
In the second in a new series of Editor’s Eye videos with industry heavyweights commenting on headlines from the show, Buchan tells us that new technology adoption can be our saviour, but the balance with job retention is a challenge.
While increased collaboration is regarded as essential to safeguarding the North Sea industry, Buchan raises questions about the degree of co-operation. But she believes the industry has got the message; that there’ll be no rapid upswing in oil prices in the short term and that we all have to adapt to a new reality.
This has been one of the main discussion points on the show floor at Offshore Europe this week. Chair of AkerBP Oyvind Eriksen told one of the event’s keynote sessions that his company had reduced break-even prices from US$62 to US$35 to date–which made it competitive with US shale–but they were looking to get down to as low as US$25 per barrel in an unending drive toward greater efficiency.
Jeff Corray, M.D., head of energy private equity, Simmons & Co, predicting that “the oil price isn’t going to break US$60 anytime soon’ added: “If we are going to compete with the lowest costs of production, i.e. shale, the story can’t be about surviving but how we grow in this environment.”