WORLD EXCLUSIVE by Scottish Energy News
There was good news – and bad news – from the N. Sea oil and gas industry, Holyrood MPs on the Scottish parliament’s Energy and Enterprise Committee heard today (2 Dec 2015).
In short, the bad news from the industry is that jobs are being cut and will continue to be cut in 2016 as a result of the 18-month slump in oil prices, which has seen the price of a barrel of benchmark Brent crude plummet by 60%.
There’s also more bad news for the Grampian economy – for instance, Aberdeen hotel occupancy rates have fallen, room rates have fallen and residential property is taking longer to sell – and fewer homes are being sold.
These were the key points made respectively by Deirdre Michie, Chief Executive, Oil and Gas UK (the industry trade association) and by James Bream, Research Director at Aberdeen and Grampian Chamber of Commerce.
But the good news came from Dr. Andy Samuel, Chief Executive of the Oil and Gas Authority – the recently set-up industry regulator – whose main aim is to achieve MER (Maximise Economic Recovery) from the North Sea oil & gas basin.
A key tool in the MER tool-box is the application of new and high technology to seismic surveys. In addition to the £20 million budget provided for new survey work – which will be shared by OGA with the Big Oil operators – the regulator is carrying out the equivalent of a police-style ‘cold case review’.
In policing terms, this means that serious and unsolved criminal cases are reviewed afresh by a new team of officers long after the events (usually murders) took place and/or when either new evidence and/or new technology becomes available.
However, new OGA seismic surveys in the Rockall & West of Shetland and the Centre-North North Sea ‘have shown very good prospects in both areas’ Dr. Samuel said in reply to a question from Richard Lyle (SNP). He added:
“Some surveys indeed have shown very interesting potential prospectivity in these areas in general and also more specifically around Rockall.
“But we need still more data – the surveys are still ongoing – and we also need to get environmental impact assessments and approvals but we are very keen to hold a licensing new in these ‘frontier areas’. This process will take around two years.
“These new prospects are very important to the UK oil and gas industry, but they won’t be a ‘game-changer’. The industry overall still needs to adapt fully to the current economic challenges
“High-quality 3D-seismic data is the key to unlocking new prospectivity in the North Sea and the new areas West of Shetland.”
In reply to a question about the prospect of new oil field finds around the Argyllshire and Clyde coasts,” Dr. Samuel said: “You can never say never <about Clyde oil> but it’s not too prospectful.”
In reply to another question from Richard Lyle, MSP, about the adverse impact on the UK balance of payments due to the fact that the UK is no longer self-sufficient in oil and gas, Dr. Samuel emphasis that the No. 1 priority for the OGA is to Maximise Economic Recovery from the North Sea, adding:
“We have the funds and the data to give ourselves the best chance of achieving MER. We’ve got to create the right conditions <in the sector> so that companies want to invest in North Sea oil and gas exploration and in maximising recovery existing fields, but OGA does not have the power to force companies to invest.”