Offshore Europe Review: Positives in Spite of the Gloom

by Jon Mainwaring, Senior Editor, EMEA 

This year’s Offshore Europe conference and exhibition, held earlier this month in Aberdeen, felt as busy as ever. More than once I had to employ a rugby sidestep in order to get past columns of ambling delegates as I hurried to the countless interviews and presentations I attended during the week.

That Offshore Europe felt busy was confirmed by figures from its organizers – the Society of Petroleum Engineers (SPE) – which showed that 55,947 people attended the show. This was the second-greatest attendance of Offshore Europe in its history. There was also a record attendance from companies exhibiting at the show, with 1,535 organizations represented – including 336 firms who were there for the first time.

The theme of the show was about “Inspiring the Next Generation” of oil and gas workers. Amid all of the layoffs that have occurred in the oil and gas sector this year, such a theme might seem incongruous with the mood of many in the industry – and perhaps even offensive to some.

However, it is important to remember that the oil industry (like the oil price itself) is cyclical and that even if the current low price persists for several years, new blood will be needed to keep the oil flowing in the future. For now, the North Sea industry is looking at how it can continue to exist in a sub-$60 per barrel environment but the UK oil and gas industry is about so much more than just the North Sea.

Figures from Oil & Gas UK last year showed that getting on for half of the turnover produced by UK-based upstream suppliers actually came from exports rather than from the domestic market. This is a consequence of several decades of oil and gas know-how being built in the North Sea region. So even without the North Sea, the UK oil and gas industry would exist – if only to serve other markets around the world. The same could be said for the oil and gas industries of other North Sea countries.

But one positive about the North Sea amid all the gloom about short-term exploration and field development is the decommissioning opportunity. At Offshore Europe, I spoke to several people from different parts of the industry who believe that the UK can lead the way in developing best practices in the decommissioning sector. Indeed, analysts at Wood Mackenzie think that decom spend in the UK North Sea will overtake development CAPEX by 2019.

The industry in northwest Europe needs to continue to focus on the positives, whether they exist elsewhere in the world in the shape of export opportunities or closer to home in the form of decommissioning.

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