Member Article

Bdaily column September 2013

By Joanne Leng MBE, Deputy Chief Executive of NOF Energy

This week marks the start of one of the biggest events in the energy sector calendar, Offshore Europe 2013 in Aberdeen.

Thousands of industry professionals and companies from the offshore industries will descend on North East Scotland for this landmark exhibition and conference with a positive outlook.

While many outside the industry will have been concerned by the recent figures from Oil & Gas UK, which revealed a decline in oil and gas production from the North Sea in 2012, those involved in the industry have their eyes firmly set on the future.

The fall in output of 14 percent in 2012 is a legacy of the last decade in North Sea oil & gas, which suffered from a sustained period of a low investment and the UK’s unstable tax regime.

However, the industry is looking beyond these figures and is more heartened by the other significant number announced by Oil & Gas UK that the UK Continental Shelf will receive record investment over the next year of £13.5 billion.

Some 470m barrels of oil and gas will come on stream in 2013, which is a fivefold increased on the average over the past three years.

This increase will be supported by 14 new oilfields coming into production this year in addition to the extension of lifespans of established fields that are also benefiting from new investment.

For example, the Forties Field in the North Sea was due to enter the decommissioning stage in 2013. However, a new £400million Apache Platform, which was completed by NOF Energy member OGN at its fabrication yard on the River Tyne, will extend the field’s production life by another 20 years.

Other significant investments include BP’s $4.5bn Clair Ridge project, west of Shetland, which should produce oil until at least 2050, and Statoil’s $7bn investment in the Mariner field, one of the largest new offshore developments in the North Sea for more than a decade.

All of this activity and investment betrays the misconceived belief that North Sea oil & gas is a sunset industry. With 20bn barrels of oil and gas still to be extracted from the UKCS, the industry has a future that extends into the second half of the 21st Century.

One of the reasons why North Sea oil production has continued for longer than some expected is the emergence of new technologies that have helped extract reserves considered uneconomic.

In addition, technologies, skills and competencies have been developed by members of the oil & gas supply chain that have increased the lifespans and productivity of offshore operations.

A large proportion of the companies heading for Offshore Europe will be buoyed by the increased investment in the North Sea and have an essential role to play in its continued success.

While economists tend to look at the headline figures of oil & gas production when assessing the UK economy, they often overlook the contribution of the UK oil & gas supply chain.

Borne out of the discovery of North Sea oil in the late 60s,the UK supply chain features companies that have developed skills and technologies that are not only applied on the UKCS, but are in demand around the world.

These companies ensure that a proportion of the investment made by companies such as BP, Statoil and Chevron stays in the UK economy by delivering the most advanced solutions to the challenges faced by North Sea operators.

Many of these world-class supply chain companies will be in attendance at Offshore Europe, as will NOF Energy, and I am sure it will be a hub of considerable new business activity as they aim to secure a proportion of this exciting and growing industry.

To talk to NOF Energy about the support available and the benefits of being part of such a powerful industry network, contact Joanne Leng MBE, Deputy Chief Executive on 0191 3846464.

This was posted in Bdaily's Members' News section by Jennifer Smith .