Deirdre Michie, Chief Executive, Oil & Gas UK, told the energy chiefs at the association’s annual conference that the focus must remain on efficiency if the industry is to maintain the competitive benefits it has worked so hard to deliver.
She said: “We are moving forward with ‘cautious optimism’ recognising that oil market fundamentals have changed almost beyond recognition in the last 10 years and that they are not going to change back any time soon.
“Bold steps have been, and are being taken and we have great examples of companies working differently to improve cost and efficiency and working hard to lock these benefits in for the long term.
“We have halved our average unit operating costs over the last two years from around $30 to $15 per barrel – while safely increasing oil and gas production.
“Reflecting improvements in capital efficiency, the development costs of the projects that have been sanctioned averaged half of those approved in 2013 and are expected to fall further this year.
“The sustainability of these improvements is always under scrutiny. We know that some of them have been achieved by tough rate reduction; job losses; retendering and, quite frankly, by putting severe pressure on the whole supply chain.
“But we also know that up to two thirds of these improvements are about efficiency and better ways of working.
“The cynics say that we are a cyclical industry that never learns its lessons. Well this time we have an opportunity to do things differently – especially if we remind ourselves that we have been part of the problem and therefore we all need – including the cynics – to be part of the solution too.”