The annual conference of the Oil and Gas UK trade association opens tomorrow in Aberdeen under the huge economic cloud of 110,000 job losses from the industry across the UK in the past two years – which includes more than 10,000 directly-employed jobs lost in the region since crude oil price peaked at more than $100-barrel two years ago.
Exploration levels currently sit at an all-time low, with recent projections for 2016 estimating half the number of exploration wells compared to 2015.
However, the association is keen to emphasise that there is still a lot of economic life left in the North Sea which is why the conference has been organised on the theme of ‘open for business’.
A spokesman said: “Billions of barrels of oil and gas have yet to be recovered from the North Sea, and the related prospects this brings makes the UKCS – with its world-class supply chain – a very attractive province in which to do business.
“It is these many opportunities – in investment, exploration, new technology and the exporting of our world-leading oilfield goods and services – that form the focus of the third annual conference organised by Oil & Gas UK.”
Under the mantle The UK Oil and Gas Industry – Open for Business, the conference will highlight the range of potential openings plus the barriers to be overcome to enable these to be seized. Nine focus sessions will be held on the following topics: –
- Cost and efficiency
- Asset stewardship
- Workforce engagement & skills
- Carbon Capture & Storage
- Late life and decommissioning
- Export opportunities
- Supply chain innovation
In his opening address tomorrow, Scottish Business Minister Keith Brown will call on the UK Government to urgently provide further fiscal support for exploration in the oil and gas sector.
He will also highlight the lack of progress made by the UK Government on the commitment made in its March budget to use the UK Guarantees Scheme for oil and gas infrastructure to secure new investment in assets of strategic importance.
He said: “The UK Government retains control of the key taxation levers affecting the sector and must take the action needed to protect businesses and jobs. Although the fiscal changes announced in the March budget were welcomed, it was ultimately a missed opportunity as a number of challenges remain.
“One of the most critical is exploration. Exploration is the future life-blood of the industry, without which we will never realise the 20 billion barrel potential of the North Sea. Higher rates of exploration are crucial if we are to maximise economic recovery and avoid premature cessation of production.
“This view is backed up by the latest Bank of Scotland survey indicating that more than half of all companies want to see a basin-wide fiscal stimulus to encourage exploration and preserve the stimulus to late-life fields.
“In the Spring Budget, the Chancellor also committed to consider loan guarantees. Access to finance continues to be considered one of the greatest challenges in the basin, but we have heard no further details since the Budget on these critical issues. The UK Government must provide more clarity on their use – they could potentially be used to ensure critical assets and infrastructure remains operational, preventing systemic risks.
“The UK Government must not consider the last Budget to be job done – further fiscal support for exploration is needed now.”