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The UK offshore oil and gas industry is now in better shape to compete for much-needed investment and confidence is slowly returning to the UK Continental Shelf (UKCS) following an intensive two-year drive to improve efficiency, streamline costs and boost productivity.

Domestic oil and gas production continues to rise and unit costs are improving, resulting in a more resilient and globally competitive basin, despite on-going lower commodity prices, according to Oil & Gas UK which today publishes its Business Outlook Report 2017.

The report points to a further 5 per cent rise in output to 1.73m boepd (630m boe pa) in 2016.  Production has now been rising since 2015, bucking a 15-year trend of decline, and should continue to rise over the next two years to peak at between 1.8 and 1.9m boepd by 2018. This is due to strong investment in new development in recent years, which has brought a total of 34 new fields into production since 2013, as well as improved productivity on existing fields. A further 13 to 18 new fields could start producing this year, building on recent success. By 2018 recent start-ups are expected to contribute up to 600,000 boepd, around one third of UKCS production.

Measures to bring the industry’s costs under control are taking effect. Average unit operating costs have improved by half within two years from $29.70/bbl to $15.30/bbl. Capital efficiency is also improving. Development costs for newly approved projects have reduced by more than 50 per cent since 2013 and are expected to be lower again in 2017 reflecting costs trends as well as investment constraints.

“Confidence is slowly returning to the basin,” says Oil & Gas UK Chief Executive Deirdre Michie. “The revival is led chiefly by exploration and production companies which may collectively see a return to positive cash-flow for the first time since 2013, provided costs are kept under control and commodity prices hold. However, this is unlikely to translate immediately into reinvestment or increased activity. The challenges for the basin ahead, particularly for companies in the supply chain, are still considerable.  As one means to help address this, Oil & Gas UK is asking the Treasury to extend the investment allowance to operational activities that are focused on maximising economic recovery.

“While the reduction in headline tax rates of recent years has helped create one of the most competitive fiscal regimes for upstream investment, certain adjustments are still required to drive investment over the longer term.”

As companies continue to adjust to lower commodity prices, they remain focussed on near-term financial rebalancing and consolidating recent efficiency improvements. Only a limited number of competitive opportunities are able to secure investment funding. As a result, investment in the UKCS is expected to continue to fall. In particular, the wave of fresh capital investment seen in recent years is declining rapidly as fields currently in development come on-stream. The industry anticipates a total spend of almost £17 billion in the UK this year, around 3 per cent lower than last year.

Exploration remains at record lows and the basin urgently needs fresh capital to stimulate activity to unlock the UK’s estimated remaining resource of up to 20 billion barrels of oil and gas.

The impact on the supply chain has been particularly hard. Companies have seen an average 30 per cent fall in revenues over the last two years and are turning increasingly to overseas markets to offset the shortfall in domestic activity. Exports of goods and services are expected to be around £12 billion in 2017. Although overseas revenues have fallen by £4 billion in since 2014, reflecting the contraction in global spend, they now account for 43 per cent of supply chain revenues, demonstrating the importance of international markets.

There are indications however that the bottom of the cycle may have been reached and that business may at last begin to stabilise. While $4 billion worth of asset and corporate deals announced since January have been a significant vote of confidence in the basin, Oil & Gas UK believes that more can be done to facilitate the transfer of assets in the basin and so stimulate additional investment. This is why industry is continuing to ask the Treasury to revise the tax treatment of decommissioning liability in support of this.

Following a two-year downward trajectory, last year saw the share price performance of listed supply chain companies with a strong UK presence pick up gently by 3 per cent. Moreover, approval for new capital investment could potentially rise this year with more than £1 billion of new field developments being sanctioned. A number of multi-billion-pound investment opportunities are also under consideration for approval in 2018 and 2019.

Deirdre Michie adds: “It is crucial that these projects are progressed efficiently through to development and new ones matured to avoid a potentially significant production decline after 2020 and provide much needed business opportunities for the supply chain.

“The Government’s proposals for an Industrial Strategy is therefore a timely intervention. Oil & Gas UK will be working to ensure the oil and gas sector remains at the heart of UK industrial policy and present a business case for a sector deal. We need to ensure the competitiveness of the supply chain and build resilience through diversification and exporting. Such an approach will enable the whole industry to continue contributing to overall UK productivity and economic performance.”

Press enquiries: For further information or to arrange an interview with an Oil & Gas UK spokesperson please contact Jennifer Phillips on 01224 577279 [email protected] Lucy Gordon on 01224 577331 [email protected] or Tim Pilgrim on 0207 802 2405 or [email protected].

 

 

Realising the potential of the North Sea’s ‘small pool’ reserves could be helped by the launch of a new set of Oil & Gas UK guidelines aimed at simplifying subsea developments.

The launch follows a call at Subsea Expo 2017 from Oil & Gas UK’s upstream policy director, Michael Tholen, for the industry to be ‘bold’ in its pursuit of small pool reserves.

‘Subsea Standardisation – Guidelines for Adopting a Simplified and Fit for Purpose Approach’ is the result of extensive research by the Efficiency Task Force’s (ETF) Subsea Technology Workgroup, a multi-disciplinary team of 31 companies, led by Steve Duthie, TechnipFMC, tasked with simplifying subsea operations.  Applying their work theoretically to a number of existing and proposed North Sea developments showed potential cost savings of up to 25 per cent.

Currently there are more than three billion barrels of oil stranded in around 350 small reserves (less than 50 million barrels) that are too costly to develop. By taking a bolder, more innovative approach in areas such as design optimisation, field layouts and manufacturing, the team found that marginal real-world prospects could be brought online. Group member Centrica was the first operator to offer one of its prospects for review, with a case study developed on their Pegasus West field in the southern North Sea revealing that savings of 20-25 per cent were feasible.

 

 

Stephen Marcos Jones, business excellence director, Oil & Gas UK said: “As an industry, we’ve become used to gold-plating and over-specifying our work. The Subsea Standardisation Project demonstrates how adopting a more simplified approach can make subsea development far more affordable.

“This project is a shining example of what can be achieved when industry experts are given the license to innovate, share knowledge, and tackle project delivery with fresh eyes.  ‘Collaboration’ is a word banded about a lot, but this is it in action.

“We hope that by taking on board these guidelines, companies will be able to unlock new reserves and in doing so help the UK continental shelf reach its full potential.”

 

Oil & Gas UK now wants to maximise the impact of these guidelines and welcomes opportunities to meet with companies who are interested in exploring how they can be meaningfully implemented into both current and future projects.

The new guidelines could also be used alongside the Project Collaboration Toolkit (PCT), recently developed by the Engineering Construction Industry Training Board (ECITB). The PCT sets out principles for collaborative work and is endorsed by Oil & Gas UK, the Offshore Contractors Association and is an Oil and Gas Authority recommended tool.

The Efficiency Task Force (ETF) was established in 2015 as a co-ordinated effort for industry by industry to seek, evidence, promote and provide access to efficient practice across oil and gas without compromise to safety.

Press enquiries: Contact Tim Pilgrim on 0207 802 2405 or [email protected] or download the press release

 

A rising number of UK operator companies are demonstrating their commitment to working smarter by signing up to two initiatives designed to reduce the legal and commercial complexity of offshore operations. As a result of collaboration between UK operators, supported by Oil & Gas UK and the Oil and Gas Authority (OGA), increasing take up of new Standard Study Agreement and an updated Commercial Code of Practice will help the sector’s drive to improve the efficiency of businesses across the UK Continental Shelf (UKCS).

The increasing level of co-operation suggests that the work of the industry’s Efficiency Task Force (ETF), as a catalyst to make the UKCS more resilient and globally competitive, is taking effect.  More companies are rallying behind the ETF Industry Behaviour Charter which aims to drive the cultural change needed to secure a sustainable future for the UK North Sea. This trend has also been observed in a recent survey by Oil & Gas UK and Deloitte which revealed both operators and suppliers reporting higher levels of successful collaborations than the previous year.

Mike Tholen, Oil & Gas UK’s upstream policy director, said: “The industry is rising to the challenge set by the OGA, and before that the Wood Review, to remove the barriers to activity in mature areas of the UKCS. It is clear industry is increasingly co-operative in its bid to simplify complexity and reduce the time taken to carry out commercial and legal negotiations.  Initiatives such as these are key to addressing the basin’s competitiveness and unlocking new developments.

“Oil & Gas UK’s new Standard Study Agreement, for example, provides a framework for more efficient commercial and technical arrangements between offshore infrastructure owners and third parties seeking to develop discoveries which are currently stranded.”

Simon Churchfield, commercial manager in the OGA’s Regulation Directorate, said: “We are very impressed with the way that industry has taken on the challenge and established a process for delivering change.

“These are great first steps and we look forward to supporting industry as it tackles more model form agreements and works to embed the revised Commercial Code of Practice and its supporting guidance into everyday working culture.”

To date, 30 companies have registered their commitment to the refreshed Commercial Code of Practice which has been rewritten to reflect the obligations associated with the MER UK strategy and negotiation best practices from across the industry.  The Code, first established by Oil & Gas UK in 2002, is designed to help companies take a co-operative approach to reaching commercial agreements in a timely and efficient manner through good practice and senior management commitment.

– Ends –

For further information, please contact Lucy Coleman on 01224 577343 or [email protected] or Jennifer Phillips on 01224 577279 [email protected]

Note to Editors

  1. The new Industry Model Form: Study Agreement, which can be found here complements the existing Infrastructure Code of Practice (“ICOP”) which aims to facilitate third party access to existing infrastructure.  The ICOP is now administered by the OGA, and was previously overseen by DECC.
  2. The new Industry Model Form: Study Agreement is the latest addition to the suite of Oil & Gas UK Standard agreements and is available to members free of charge. Other standard agreements include the joint operating agreement, decommissioning security agreement, confidentiality agreement and pipeline proximity agreement.
  3. Information about the Commercial Code of Practice is available here.
  4. Oil & Gas UK’s wholly owned subsidiary LOGIC (Leading Oil & Gas Industry Competitiveness) provides a separate suite of standard contracts for the supply chain.
  5. Information on the Efficiency Task Force can be found here.

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its membership comprises oil and gas producers and contractor companies.

 

 

Request a copy of the UKCS upstream supply chain collaboration survey

collaboration-index-inforgraphics-deloitte-v2-strip1

The oil and gas industry has ‘cleared the first hurdle’ in its drive for better collaboration but there is still more work to be done, according to a new survey by Oil & Gas UK and Deloitte.

The ‘UKCS upstream supply chain collaboration survey’ asked British and Dutch operators and suppliers about their experiences working alongside other companies operating in the North Sea.

In a signal that the objectives of the UK Government’s Maximising Economic Recovery (MER) strategy are starting to be met, nearly nine out of ten (86%) of respondents said that they see collaboration as an integral part of their everyday business – a 12 per cent increase on the previous year. Nearly all (98%) see collaboration as ‘crucial’ to their future success.

In addition, the survey found:

  • Both operators and suppliers reported higher levels of successful collaborations than the previous year: 40% of respondents were satisfied with the quality of collaboration compared with 27% last year.
  • Cost reduction remains the main reason for collaboration: 32% stated that they collaborated to reduce costs
  • Collaboration between Dutch operators and suppliers is focused on optimising capabilities (29%), whereas in the UKCS operators collaborate to reduce costs (36%).
  • The collaboration Index score has improved from 6.1 out of a possible 10 in 2015 to 6.6 in 2016. This shows the efforts invested both by the operators and the suppliers to strengthen relationships.

Stephen Marcos Jones, director of business excellence at Oil & Gas UK said: “Whilst it’s encouraging to see that the industry is now really on board with the importance of collaboration, we have just cleared the first hurdle and there is much more work for us to do.

“To see truly sustainable change, we need to look beyond collaboration to cut costs towards projects driven by innovation, knowledge sharing, and a desire to work smarter and more efficiently.

“Oil & Gas UK’s Efficiency Task Force will continue to support industry collaboration through initiatives such as the Subsea Technology Project to standardise specifications and the development of the Tendering Efficiency Framework to simplify and reduce duplication in the procurement process. The task force also promotes the use of change enablers such as the Industry Behaviour Charter, the Rapid Efficiency Exchange to share case studies and challenges, as well as the continuous improvement network. Our hope is that future surveys will show further improvements across the sector as a result of these collective efforts.”

Bevan Whitehead, Oil & Gas Leader at Deloitte said: “The results of our latest survey suggest that the industry has taken a considerable step forward toward improving supply chain collaboration in the past 12 months. A huge opportunity for real transformation remains, if companies can take the next step and embrace radical changes in how they work together to build efficient, sustainable and long-term businesses in the UKCS.

“There are many examples of successful collaboration in the UKCS and the Netherlands from which to build. With a world-class supplier base in place, the change the industry needs depends on strong leadership and a willingness to take action.”

The survey is the third in a series of surveys carried out by Deloitte to gauge the effectiveness of industry efforts, supported by Oil & Gas UK’s Efficiency Task Force (ETF), to improve cross-industry collaboration.

Last year the Efficiency Task Force released the Industry Behaviours Charter to encourage a collective commitment from the offshore oil and gas industry to work more efficiently and co-operatively.

collaboration-index-inforgraphics-deloitte-v3-strip-2

Notes to Editors

The results of the first Unstructured Data Challenge 2016 set by Common Data Access (CDA) to identify opportunities for extracting further value from UK North Sea exploration data will be shared at an industry workshop on November 30 at the Village Hotel in Aberdeen.

CDA, a subsidiary of Oil & Gas UK and provider of data management services for seismic and well information to the sector, issued the challenge in March. Its aim is to show how modern data and analytical techniques can yield valuable insights to assist industry efforts to maximise economic recovery from the UK Continental Shelf.

Nine companies:  Agile Data Decisions; AGR Software; Cray Inc.; Flare Solutions; Hampton Data Services; Independent Data Services; KADME; New Digital Business; and Schlumberger Software Integrated Solutions took up the challenge. CDA gave the companies bulk access to more than 50 years of released data stored in its UKOilandGasData repository allowing them the opportunity to demonstrate how applying modern data science and data analytics techniques to sub-surface data sets could add value to current understanding of the subsurface.

At the workshop in Aberdeen, the participating companies will show how modern data science could help the industry handle high volumes of vintage and current drilling data. The new techniques have the potential to help deliver offshore well planning at lower cost, reduce geological uncertainty and pinpoint prospective areas for exploration with greater accuracy.

Malcolm Fleming, Chief Executive of CDA said: “The documents and data CDA holds on behalf of its members describe over 50 years of UKCS exploration and development activity. Through the application of current data science and machine learning techniques that the participants in the Data Challenge put forward, this archive becomes an invaluable resource for exploring in a low cost, resource constrained world. Data science enables better, faster decision making, and initiatives like the Data Challenge can help our industry to go after the estimated up to 20 billion barrels of oil and gas on the UKCS.”

Ends

For more information, please contact Lucy Gordon at [email protected] or 01224 577331.

Note to Editors:

CDA (Common Data Access Limited) is a not-for-profit subsidiary of Oil & Gas UK, set up in 1995 to provide data management services to its members and to the UK oil industry.

The CDA web portal is at www.UKOilandGasData.com.

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members are companies licensed by the Government to explore for, and produce, oil and gas in UK waters and those in the industry’s supply chain.

You are invited to attend the presentation of the results of the Unstructured Data Challenge at the Village Hotel, Aberdeen on November 30.  To book your place, contact Sakthi Norton at [email protected]

More information regarding the workshop may be obtained from the following website:
http://cdal.com/index.php/2016/10/13/cda-ecim-joint-workshop-digital-dividends-from-subsurface-data-data-science-meets-the-unstructured-data-challenge/

Pre-event interviews with Malcolm Fleming, Chief Executive of CDA, can be arranged through Leila Coleman ([email protected]), with additional interviews with participants available on request

Business Outlook 2017: Fresh investment sought as efficiency improves

The UK offshore oil and gas industry is now in better shape to compete for much-needed investment and confidence is slowly returning to the UK Continental Shelf (UKCS) following an intensive two-year drive to improve efficiency, streamline costs and boost productivity.

Domestic oil and gas production continues to rise and unit costs are improving, resulting in a more resilient and globally competitive basin, despite on-going lower commodity prices, according to Oil & Gas UK which today publishes its Business Outlook Report 2017.

The report points to a further 5 per cent rise in output to 1.73m boepd (630m boe pa) in 2016.  Production has now been rising since 2015, bucking a 15-year trend of decline, and should continue to rise over the next two years to peak at between 1.8 and 1.9m boepd by 2018. This is due to strong investment in new development in recent years, which has brought a total of 34 new fields into production since 2013, as well as improved productivity on existing fields. A further 13 to 18 new fields could start producing this year, building on recent success. By 2018 recent start-ups are expected to contribute up to 600,000 boepd, around one third of UKCS production.

Measures to bring the industry’s costs under control are taking effect. Average unit operating costs have improved by half within two years from $29.70/bbl to $15.30/bbl. Capital efficiency is also improving. Development costs for newly approved projects have reduced by more than 50 per cent since 2013 and are expected to be lower again in 2017 reflecting costs trends as well as investment constraints.

“Confidence is slowly returning to the basin,” says Oil & Gas UK Chief Executive Deirdre Michie. “The revival is led chiefly by exploration and production companies which may collectively see a return to positive cash-flow for the first time since 2013, provided costs are kept under control and commodity prices hold. However, this is unlikely to translate immediately into reinvestment or increased activity. The challenges for the basin ahead, particularly for companies in the supply chain, are still considerable.  As one means to help address this, Oil & Gas UK is asking the Treasury to extend the investment allowance to operational activities that are focused on maximising economic recovery.

“While the reduction in headline tax rates of recent years has helped create one of the most competitive fiscal regimes for upstream investment, certain adjustments are still required to drive investment over the longer term.”

As companies continue to adjust to lower commodity prices, they remain focussed on near-term financial rebalancing and consolidating recent efficiency improvements. Only a limited number of competitive opportunities are able to secure investment funding. As a result, investment in the UKCS is expected to continue to fall. In particular, the wave of fresh capital investment seen in recent years is declining rapidly as fields currently in development come on-stream. The industry anticipates a total spend of almost £17 billion in the UK this year, around 3 per cent lower than last year.

Exploration remains at record lows and the basin urgently needs fresh capital to stimulate activity to unlock the UK’s estimated remaining resource of up to 20 billion barrels of oil and gas.

The impact on the supply chain has been particularly hard. Companies have seen an average 30 per cent fall in revenues over the last two years and are turning increasingly to overseas markets to offset the shortfall in domestic activity. Exports of goods and services are expected to be around £12 billion in 2017. Although overseas revenues have fallen by £4 billion in since 2014, reflecting the contraction in global spend, they now account for 43 per cent of supply chain revenues, demonstrating the importance of international markets.

There are indications however that the bottom of the cycle may have been reached and that business may at last begin to stabilise. While $4 billion worth of asset and corporate deals announced since January have been a significant vote of confidence in the basin, Oil & Gas UK believes that more can be done to facilitate the transfer of assets in the basin and so stimulate additional investment. This is why industry is continuing to ask the Treasury to revise the tax treatment of decommissioning liability in support of this.

Following a two-year downward trajectory, last year saw the share price performance of listed supply chain companies with a strong UK presence pick up gently by 3 per cent. Moreover, approval for new capital investment could potentially rise this year with more than £1 billion of new field developments being sanctioned. A number of multi-billion-pound investment opportunities are also under consideration for approval in 2018 and 2019.

Deirdre Michie adds: “It is crucial that these projects are progressed efficiently through to development and new ones matured to avoid a potentially significant production decline after 2020 and provide much needed business opportunities for the supply chain.

“The Government’s proposals for an Industrial Strategy is therefore a timely intervention. Oil & Gas UK will be working to ensure the oil and gas sector remains at the heart of UK industrial policy and present a business case for a sector deal. We need to ensure the competitiveness of the supply chain and build resilience through diversification and exporting. Such an approach will enable the whole industry to continue contributing to overall UK productivity and economic performance.”

Press enquiries: For further information or to arrange an interview with an Oil & Gas UK spokesperson please contact Jennifer Phillips on 01224 577279 [email protected] Lucy Gordon on 01224 577331 [email protected] or Tim Pilgrim on 0207 802 2405 or [email protected].

 

Subsea Guidelines: Take a bolder approach to subsea simplification

 

Realising the potential of the North Sea’s ‘small pool’ reserves could be helped by the launch of a new set of Oil & Gas UK guidelines aimed at simplifying subsea developments.

The launch follows a call at Subsea Expo 2017 from Oil & Gas UK’s upstream policy director, Michael Tholen, for the industry to be ‘bold’ in its pursuit of small pool reserves.

‘Subsea Standardisation – Guidelines for Adopting a Simplified and Fit for Purpose Approach’ is the result of extensive research by the Efficiency Task Force’s (ETF) Subsea Technology Workgroup, a multi-disciplinary team of 31 companies, led by Steve Duthie, TechnipFMC, tasked with simplifying subsea operations.  Applying their work theoretically to a number of existing and proposed North Sea developments showed potential cost savings of up to 25 per cent.

Currently there are more than three billion barrels of oil stranded in around 350 small reserves (less than 50 million barrels) that are too costly to develop. By taking a bolder, more innovative approach in areas such as design optimisation, field layouts and manufacturing, the team found that marginal real-world prospects could be brought online. Group member Centrica was the first operator to offer one of its prospects for review, with a case study developed on their Pegasus West field in the southern North Sea revealing that savings of 20-25 per cent were feasible.

 

 

Stephen Marcos Jones, business excellence director, Oil & Gas UK said: “As an industry, we’ve become used to gold-plating and over-specifying our work. The Subsea Standardisation Project demonstrates how adopting a more simplified approach can make subsea development far more affordable.

“This project is a shining example of what can be achieved when industry experts are given the license to innovate, share knowledge, and tackle project delivery with fresh eyes.  ‘Collaboration’ is a word banded about a lot, but this is it in action.

“We hope that by taking on board these guidelines, companies will be able to unlock new reserves and in doing so help the UK continental shelf reach its full potential.”

 

Oil & Gas UK now wants to maximise the impact of these guidelines and welcomes opportunities to meet with companies who are interested in exploring how they can be meaningfully implemented into both current and future projects.

The new guidelines could also be used alongside the Project Collaboration Toolkit (PCT), recently developed by the Engineering Construction Industry Training Board (ECITB). The PCT sets out principles for collaborative work and is endorsed by Oil & Gas UK, the Offshore Contractors Association and is an Oil and Gas Authority recommended tool.

The Efficiency Task Force (ETF) was established in 2015 as a co-ordinated effort for industry by industry to seek, evidence, promote and provide access to efficient practice across oil and gas without compromise to safety.

Press enquiries: Contact Tim Pilgrim on 0207 802 2405 or [email protected] or download the press release

 

Oil and Gas Industry Collaboration to Help Simplify Commercial and Legal Practices

A rising number of UK operator companies are demonstrating their commitment to working smarter by signing up to two initiatives designed to reduce the legal and commercial complexity of offshore operations. As a result of collaboration between UK operators, supported by Oil & Gas UK and the Oil and Gas Authority (OGA), increasing take up of new Standard Study Agreement and an updated Commercial Code of Practice will help the sector’s drive to improve the efficiency of businesses across the UK Continental Shelf (UKCS).

The increasing level of co-operation suggests that the work of the industry’s Efficiency Task Force (ETF), as a catalyst to make the UKCS more resilient and globally competitive, is taking effect.  More companies are rallying behind the ETF Industry Behaviour Charter which aims to drive the cultural change needed to secure a sustainable future for the UK North Sea. This trend has also been observed in a recent survey by Oil & Gas UK and Deloitte which revealed both operators and suppliers reporting higher levels of successful collaborations than the previous year.

Mike Tholen, Oil & Gas UK’s upstream policy director, said: “The industry is rising to the challenge set by the OGA, and before that the Wood Review, to remove the barriers to activity in mature areas of the UKCS. It is clear industry is increasingly co-operative in its bid to simplify complexity and reduce the time taken to carry out commercial and legal negotiations.  Initiatives such as these are key to addressing the basin’s competitiveness and unlocking new developments.

“Oil & Gas UK’s new Standard Study Agreement, for example, provides a framework for more efficient commercial and technical arrangements between offshore infrastructure owners and third parties seeking to develop discoveries which are currently stranded.”

Simon Churchfield, commercial manager in the OGA’s Regulation Directorate, said: “We are very impressed with the way that industry has taken on the challenge and established a process for delivering change.

“These are great first steps and we look forward to supporting industry as it tackles more model form agreements and works to embed the revised Commercial Code of Practice and its supporting guidance into everyday working culture.”

To date, 30 companies have registered their commitment to the refreshed Commercial Code of Practice which has been rewritten to reflect the obligations associated with the MER UK strategy and negotiation best practices from across the industry.  The Code, first established by Oil & Gas UK in 2002, is designed to help companies take a co-operative approach to reaching commercial agreements in a timely and efficient manner through good practice and senior management commitment.

– Ends –

For further information, please contact Lucy Coleman on 01224 577343 or [email protected] or Jennifer Phillips on 01224 577279 [email protected]

Note to Editors

  1. The new Industry Model Form: Study Agreement, which can be found here complements the existing Infrastructure Code of Practice (“ICOP”) which aims to facilitate third party access to existing infrastructure.  The ICOP is now administered by the OGA, and was previously overseen by DECC.
  2. The new Industry Model Form: Study Agreement is the latest addition to the suite of Oil & Gas UK Standard agreements and is available to members free of charge. Other standard agreements include the joint operating agreement, decommissioning security agreement, confidentiality agreement and pipeline proximity agreement.
  3. Information about the Commercial Code of Practice is available here.
  4. Oil & Gas UK’s wholly owned subsidiary LOGIC (Leading Oil & Gas Industry Competitiveness) provides a separate suite of standard contracts for the supply chain.
  5. Information on the Efficiency Task Force can be found here.

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its membership comprises oil and gas producers and contractor companies.

 

 

Oil and gas industry has ‘cleared the first hurdle’ in collaboration drive, survey shows

Request a copy of the UKCS upstream supply chain collaboration survey

collaboration-index-inforgraphics-deloitte-v2-strip1

The oil and gas industry has ‘cleared the first hurdle’ in its drive for better collaboration but there is still more work to be done, according to a new survey by Oil & Gas UK and Deloitte.

The ‘UKCS upstream supply chain collaboration survey’ asked British and Dutch operators and suppliers about their experiences working alongside other companies operating in the North Sea.

In a signal that the objectives of the UK Government’s Maximising Economic Recovery (MER) strategy are starting to be met, nearly nine out of ten (86%) of respondents said that they see collaboration as an integral part of their everyday business – a 12 per cent increase on the previous year. Nearly all (98%) see collaboration as ‘crucial’ to their future success.

In addition, the survey found:

  • Both operators and suppliers reported higher levels of successful collaborations than the previous year: 40% of respondents were satisfied with the quality of collaboration compared with 27% last year.
  • Cost reduction remains the main reason for collaboration: 32% stated that they collaborated to reduce costs
  • Collaboration between Dutch operators and suppliers is focused on optimising capabilities (29%), whereas in the UKCS operators collaborate to reduce costs (36%).
  • The collaboration Index score has improved from 6.1 out of a possible 10 in 2015 to 6.6 in 2016. This shows the efforts invested both by the operators and the suppliers to strengthen relationships.

Stephen Marcos Jones, director of business excellence at Oil & Gas UK said: “Whilst it’s encouraging to see that the industry is now really on board with the importance of collaboration, we have just cleared the first hurdle and there is much more work for us to do.

“To see truly sustainable change, we need to look beyond collaboration to cut costs towards projects driven by innovation, knowledge sharing, and a desire to work smarter and more efficiently.

“Oil & Gas UK’s Efficiency Task Force will continue to support industry collaboration through initiatives such as the Subsea Technology Project to standardise specifications and the development of the Tendering Efficiency Framework to simplify and reduce duplication in the procurement process. The task force also promotes the use of change enablers such as the Industry Behaviour Charter, the Rapid Efficiency Exchange to share case studies and challenges, as well as the continuous improvement network. Our hope is that future surveys will show further improvements across the sector as a result of these collective efforts.”

Bevan Whitehead, Oil & Gas Leader at Deloitte said: “The results of our latest survey suggest that the industry has taken a considerable step forward toward improving supply chain collaboration in the past 12 months. A huge opportunity for real transformation remains, if companies can take the next step and embrace radical changes in how they work together to build efficient, sustainable and long-term businesses in the UKCS.

“There are many examples of successful collaboration in the UKCS and the Netherlands from which to build. With a world-class supplier base in place, the change the industry needs depends on strong leadership and a willingness to take action.”

The survey is the third in a series of surveys carried out by Deloitte to gauge the effectiveness of industry efforts, supported by Oil & Gas UK’s Efficiency Task Force (ETF), to improve cross-industry collaboration.

Last year the Efficiency Task Force released the Industry Behaviours Charter to encourage a collective commitment from the offshore oil and gas industry to work more efficiently and co-operatively.

collaboration-index-inforgraphics-deloitte-v3-strip-2

Notes to Editors

Modern data science unlocks over 50 years of UKCS data

The results of the first Unstructured Data Challenge 2016 set by Common Data Access (CDA) to identify opportunities for extracting further value from UK North Sea exploration data will be shared at an industry workshop on November 30 at the Village Hotel in Aberdeen.

CDA, a subsidiary of Oil & Gas UK and provider of data management services for seismic and well information to the sector, issued the challenge in March. Its aim is to show how modern data and analytical techniques can yield valuable insights to assist industry efforts to maximise economic recovery from the UK Continental Shelf.

Nine companies:  Agile Data Decisions; AGR Software; Cray Inc.; Flare Solutions; Hampton Data Services; Independent Data Services; KADME; New Digital Business; and Schlumberger Software Integrated Solutions took up the challenge. CDA gave the companies bulk access to more than 50 years of released data stored in its UKOilandGasData repository allowing them the opportunity to demonstrate how applying modern data science and data analytics techniques to sub-surface data sets could add value to current understanding of the subsurface.

At the workshop in Aberdeen, the participating companies will show how modern data science could help the industry handle high volumes of vintage and current drilling data. The new techniques have the potential to help deliver offshore well planning at lower cost, reduce geological uncertainty and pinpoint prospective areas for exploration with greater accuracy.

Malcolm Fleming, Chief Executive of CDA said: “The documents and data CDA holds on behalf of its members describe over 50 years of UKCS exploration and development activity. Through the application of current data science and machine learning techniques that the participants in the Data Challenge put forward, this archive becomes an invaluable resource for exploring in a low cost, resource constrained world. Data science enables better, faster decision making, and initiatives like the Data Challenge can help our industry to go after the estimated up to 20 billion barrels of oil and gas on the UKCS.”

Ends

For more information, please contact Lucy Gordon at [email protected] or 01224 577331.

Note to Editors:

CDA (Common Data Access Limited) is a not-for-profit subsidiary of Oil & Gas UK, set up in 1995 to provide data management services to its members and to the UK oil industry.

The CDA web portal is at www.UKOilandGasData.com.

Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members are companies licensed by the Government to explore for, and produce, oil and gas in UK waters and those in the industry’s supply chain.

You are invited to attend the presentation of the results of the Unstructured Data Challenge at the Village Hotel, Aberdeen on November 30.  To book your place, contact Sakthi Norton at [email protected]

More information regarding the workshop may be obtained from the following website:
http://cdal.com/index.php/2016/10/13/cda-ecim-joint-workshop-digital-dividends-from-subsurface-data-data-science-meets-the-unstructured-data-challenge/

Pre-event interviews with Malcolm Fleming, Chief Executive of CDA, can be arranged through Leila Coleman ([email protected]), with additional interviews with participants available on request

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