There’s Plenty to be Positive about in UK Oil, Gas                          

By Jon Mainwaring

The results of a recent Bank of Scotland survey provided some welcome cheer for the UK’s offshore oil and gas sector. The Bank of Scotland said March 13 that out of 101 North Sea oil and gas companies it questioned, 92 were planning to expand – which was up from 69 percent of firms that were asked about growth in a similar survey by the bank last year. The latest survey also found that more than two-thirds of the firms it talked to were planning to increase staff numbers during the next 24 months.

The optimism highlighted by the survey makes a refreshing change in light of far more negative headlines in the UK press during the past few months, with one or two excitable headline writers even suggesting something close to Armageddon for the UK’s offshore industry.

Here at Rigzone’s offices in London, we continue to closely follow developments in the North Sea as well as in the wider European oil and gas industry and – in spite of the low oil price and announcements of many job losses in the sector – there is still plenty of good news to be had.

Firstly, the industry is carrying on with plenty of development work in the UK North Sea. For example, BP plc is pressing ahead with two major projects on the UK Continental Shelf – Clair Ridge and Schiehallion – while GDF Suez and Centrica are developing the southern North Sea’s Cygnus gas project that is set to support up to 4,800 jobs during its current 5-year construction phase. Smaller energy companies are also involved in developing fields on the UKCS, with independent energy firm Premier Oil plc set to begin development drilling on the Catcher field later this year.

In the oilfield services subsector of the oil and gas industry plenty of comfort can be taken from the fact that important European offshore services companies – such as Aker Solutions ASA and Technip S.A. (both of which have significant operations located in the UK) – increased their order books last year. In Technip’s case, its backlog of orders achieved a record level of $23.8 billion by the end of 2014.

In addition, after decades of producing oil and gas from the North Sea, Scotland – and Aberdeen in particular – is now an important global hub for oilfield skills and know-how. This is reflected by last year’s report from Scottish Development International that showed exports by Scotland’s oil and gas supply chain companies had grown to almost $17 billion annually – accounting for around half of the supply chain sector’s total revenue. While North America remains the main region for exports by the Scottish oil and gas supply chain sector, Africa is catching up fast as demonstrated by sales to the region doubling to $3.9 billion between 2012 and 2013.

Times may be a bit tougher in upstream oil and gas at the moment, but the UK offshore sector is clearly far from finished.


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