We MUST drill MER North Sea wells, declare new Oil and Gas UK chairmen

Oil workers

The oil and gas industry must drill more new wells in the North Sea – by investing more in the basin, the newly appointed joint chairmen of Oil and Gas UK have declared.

With immediate effect, Neil McCulloch, president, North Sea at EnQuest, and Terry Savage, corporate relationship director at Global Energy Group, have taken over as joint-chairmen of the Board, representing the operator and contractor communities respectively.

Their predecessors, Trevor Garlick of BP and John Pearson of Amec Foster Wheeler, have now both stepped down from the Board having completed the maximum period of tenure allowed.

McCulloch said: “Over the past 18 months, enormous progress has been made with our member companies confronting cost and efficiency challenges, the likes of which we have not seen before. We have also seen greater engagement, including delivery of much needed fiscal reform, with both the UK and Scottish Governments.

“With the Oil and Gas Authority now bedded in, we have more in hand to deliver Maximising Economic Recovery (MER)

“The most important role for my tenure as co-chairman is to help drive investment in the UK Continental Shelf, most easily measured by the number of wells being drilled – which is at an all-time low.

“We have to make the UKCS more competitive for investment by streamlining operations and achieving average unit operating costs of $15/boe.

“And we will have to deliver drilling costs of less than half their peak level, and deliver better on our project promises; all the while maintaining our basin’s exemplary safety record.”

Terry Savage
Terry Savage

Terry Savage added: “The industry is facing significant challenges ahead as it addresses its costs and efficiencies. I look forward to working with Neil and the Board to address the change in culture and behaviours required to have a sustainable future in the UKCS.”

Existing Board members Ray Riddoch, managing director and senior vice president Europe at Nexen and Neil Sims, vice president ECIS Region at Expro North Sea, take on the vice co-chairman roles  representing the operator and contractor communities respectively. Craig May, managing director of Chevron Upstream Europe, remains as honorary treasurer.

Other appointments to the Oil & Gas UK Board are:

Mark Thomas, regional president of BP North Sea, who brings to the Board more than 34 years’ experience in operations, strategy and commercial positions gained globally

Walter Thain, managing director, West, Petrofac Engineering & Production Services business, who has 25 years’ global oil and gas experience including senior roles across strategy, business development and operations within the oilfield services sector; and

Morten Kelstrup, managing director of Maersk Oil UK, who brings a wealth of experience gained in commercial and leadership roles in a range of oil and gas companies.

Dear Colleague,

You are invited to attend a conference that we are holding in April at the University of Aberdeen at which we will consider the Issues in Delivering MER within the new environment in which the UKCS is now operating. 

Oil & Gas Authority logoWe are confident that we have created the very first conference of this kind, where a range of speakers from academia and industry will debate the major legal, organisational and technical issues, many of which have not yet been discussed or debated in sufficient detail, and are not yet common knowledge.

The conference will offer you significant opportunity to hear from key experts, network with fellow colleagues and get involved in the key areas of discussion.

Find out full details and register for the event here.

Upon registration we will send you out a full schedule.

08:30 – 09:00 Registration and Refreshments
09.00 – 10.00 Welcome

Professor Sir Ian Diamond, University of Aberdeen

Plenary – The Role of Maximising Economic Recovery in Securing the Future of the UK Continental Shelf

Paul Goodfellow, Shell

10.00 –10.45 The Legal and Policy Perspective

Gunther Newcombe, OGA

10.45- 11.15 Refreshment Break
11.15- 12.00 Collaboration v Collusion:

Graeme Young, CMS

Navigating competition law risks associated with collaboration and UK MER strategy. Is industry right to raise competition law concerns associated with collaboration and the transformational change being demanded by DECC and the OGA? How can these concerns be addressed without exposing industry to unacceptable legal risks?

12.00 – 12.45 The Economic Challenges of Cost Reduction

Derek Leith, Ernst and Young

12.45 – 13.30 Lunch and Networking
13.30 – 14.05 Legal Issues

Professor John Paterson, University of Aberdeen

14.05 – 14.40 Why Down Markets can be Good


14.40 – 15.15 The trials and tribulations of technology developments

Ian Phillips, OGIC

15.15 – 15.40 Refreshments and Networking
15.40 – 16.15 Budget Impacts and Implications

Professor Alex Kemp, University of Aberdeen

16.15- 17.15 Panel Discussion

Prof Alex Kemp, University of Aberdeen

Ian Phillips, OGIC

Derek Leith, Ernst and Young

Graeme Young, CMS

Gordon Drummond, NSRI

17.15 Close and Depart

Policy paper: Energy Bill 2015/16 Relevant Documents

These DECC fact sheets provide an overview of policy areas in the Energy Bill, while Keeling Schedules illustrate how primary legislation would be amended by clauses in the Bill

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed