Industry view: What now for the oil and gas industry?
Published: 19 Sep 2014
By Gerry Miller, senior vice president of business development, Costain Upstream
The North Sea oil and gas industry has been subjected to greater scrutiny than ever in the run up to the independence referendum. The attention given to the industry and analysis of its value to Scotland and the UK, from both sides of the political argument and impartial sources, has led to heightened awareness of our sector.
Knowledge of the challenges facing our industry is widespread. Low levels of production, high operating costs and the demand for new wells have been widely reported. Now people want to know what the future holds.
Uncertainty in the political outcome has been blamed for stalling investment in the UK oil and gas industry in recent months. A report published this summer by business advisory group Deloitte stated that oil companies had adopted a “wait and see” policy.
Regardless of today’sFri 19th outcome we will be doing the same as we always have – providing the highest standard of service to our clients. The prize is to deliver a project to be proud of which produces the best possible return on investment through efficient and effective co-operation within the industry.
The Wood Review suggests the best way forward for the industry requires a more collaborative approach. According to the report, this will help realise the estimated 24billion barrel of oil equivalent (boe) potential from the UKCS, improve the efficiency of explorations, development and production while also maximising the financial recovery.
Continued success for the North Sea oil and gas industry will be driven by focussing on two areas, asset development and asset improvement. Time must be devoted to planning ahead for greenfield projects to drive the industry into the next phase of production. Existing wells and facilities should also fulfil their potential by delivering Enhanced Oil Recovery and reducing the length of any period of production shutdown.
Collaboration has already been embraced by Costain Upstream. We know from experience that the best outcome for a project will be achieved by encouraging co-operative relationships. We all have a stake in this industry and it is of value to every one of us to form effective and mutually beneficial partnerships.
The established convention has been a fragmented approach where various parties, such as engineers, consultants and contractors, contribute with limited scope to different aspects of the same project. This can create unnecessary complexities both in terms of design and delivery.
Ensuring continuity throughout a project, from planning to execution, will decrease the risk of project overruns, reduced efficiency or other complications.
We have helped clients boost their return on investment by bringing on board our engineers and industry professionals with extensive experience from the early stage of a project. The foundation of our success is the development of long-term and knowledge sharing relationships where clients benefit from our depth of experience.
So whatever we wake up to this morning, one thing is certain, our customers’ opportunities and assets will require the same rigor and delivery as they did yesterday.