North Sea Task Force launched to speed up oil industry cost-efficiency drive

John Pearson, Group President, AMEC Europe
John Pearson, Group President, AMEC Europe

By DARA BUTTERFIELD 

Oil & Gas UK today launches its Efficiency Task Force – a group tasked with driving improvement, making the sector more competitive, and supporting the drive to maximise economic recovery (MER) from the N. Sea – following a meeting of the trade association’s operator and contractor councils.

The ETF is led by John Pearson, Group President Northern Europe and CIS, AMEC Foster Wheeler, and Oil & Gas UK Co-Chairman.

He said: “The Efficiency Task Force will encourage cooperation and focus on initiatives that add real value for our sector – helping the UK to compete globally.

“Tackling efficiency has been at the forefront of industry minds for some time – but has become more acute and urgent as the value of our end product has more than halved in the last year.

“We now need to step up, increase the effort and resource we’re putting in, and get the job done as a united industry.

“We’re taking a three pronged approach under the themes: Business Process; Standardisation; and Cooperation, Culture, and Behaviours; and are focusing on two or three projects in each. What’s essential here is that we don’t try to boil the ocean. We’ve put a lot of thought into where we can have most impact – and will be working with the industry to see these projects through.

“Only if industry works together can we achieve the major transformation in efficiency we need to see.”

The ETF is to focus on three themes:

  • Cooperation, Culture, and Behaviours: the ETF will aim to deliver the behavioural change this sector needs to compete in a lower oil price world, and will put in place an Efficiency Charter and host efficiency sharing events before the end of the year.
  • Standardisation: the ETF will look to simplify business approaches and drive standard solutions in order to lower costs, accelerate delivery and reduce operational complexity. Early analysis suggests that simplification and standardisation in areas such as well plugging and abandonment could deliver significant savings.
  • Business Process: is an area where significant saving could be achieved across the industry. The ETF will review the day to day operations of the offshore oil and gas industry, exploring how companies can work together to share resources and good practice.

Deirdre Michie, Chief Executive, Oil & Gas UK, commented: “Oil and gas currently account for 70% of the UK’s primary energy demand – a figure which will remain unchanged until at least 2030, according to the Department for Energy.

“A large proportion of that demand could still be met by oil and gas produced from our resources in the UK. This is an estimated 20 billion barrels of oil and gas still to find on the UK Continental Shelf, but the industry is undoubtedly facing an uphill struggle to maximise recovery.

“Becoming more efficient is the most critical challenge we face today. The oil price has more than halved from last year to around $50-barrel whilst the cost of oil and gas operations more than doubled since 2014.

“The Efficiency Task Force provides us with the vehicle we need to enact change – quickly and effectively with those companies who are ready and willing to be the early adopters of such change. Moving from focusing on cost reduction to efficiency improvement and the transformational change we need to see to help sustain activity in the North Sea, and in turn sustain oil and gas supply and hundreds of thousands of jobs throughout the country.”

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