The leading representative body for the UK offshore oil and gas industry, OGUK, has today (Wednesday, November 11) warned that it could take up to three years to restart many of the projects lost due to the impact of the coronavirus pandemic and commodity price downturn.

The warning comes in its Autumn Snapshot published today, which provides a business outlook for the third quarter of 2020.

The report finds that low sentiment in the outlook of companies continues into 2021, reflecting high levels of uncertainty in the market and reinforcing challenges brought on by Covid-19 are likely to persist.

However, despite the operational difficulties being faced, the industry continues to safely deliver secure and affordable energy, with production levels having remained relatively strong throughout the year.

OGUK’s report reinforces that a North Sea transition deal for this sector is essential in meeting the need for secure, affordable energy to be produced with fewer emissions and to position the UK as a leader in developing low-carbon solutions.

Commenting on the report, OGUK’s market intelligence manager Ross Dornan said:

“New projects and investments are crucial to providing secure energy, sustaining supply chain capabilities, and ensuring the UK is viewed as a good place for these companies to anchor their resources.

“As our Autumn Snapshot shows, it is estimated that companies could continue to take a conservative approach in 2021, reflecting the ongoing challenges of the coronavirus pandemic and the wider economic downturn.

“Securing a North Sea transition deal for this changing industry is critical in ensuring the sector can use its essential skills to help build back better, providing many of the net-zero carbon emissions solutions required for the future.

“At the same time, OGUK’s Recovery Group continues to help shape the sector’s recovery as it takes steps to support the energy transition.

“The current fragile position of many areas of the supply chain means that this future contribution cannot be taken for granted. Industry needs this support now if it is going to be able to deliver later.”

Other indicators show UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019, and drilling activity levels are on their way to becoming the lowest since the early 1970s.

Increasing activity, investment levels, and progress made by OGUK’s recovery group will be vital in providing new opportunities for the supply chain as the industry navigates the transition to a low-carbon future.

 

Key findings:

  • Brent crude averaged just under $41/bbl across the first 10 months of 2020. This is $23/bbl less than the 2019 average and prices at the end of October were at a four-month low ($37/bbl). Market expectations are than price will take time to recover.
  • The average day ahead NBP gas prices in the first 10 months of 2020 was 21.61 pence/therm (p/th), 38 per cent lower than the average for the same period in 2019
  • UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019
  • OGUK members indicate low sentiment levels
  • Companies outline little change in their current outlook for 2021
  • Production has remained relatively strong, however shows a slight reduction of 2.5 per cent so far this year and is around 3 per cent lower than the 2019 full year daily average. This could be expected to recover in Q4 closer to in line with 2019 levels.
  • Fifty-four wells were spudded in the first 10 months of 2020, meaning the year is now almost certain to see the lowest total levels of drilling activity since the early 1970s
  • Only six exploration wells have been spudded so far and it is possible that there will be no further exploration drilling this year
  • Estimated that investors could continue to take a conservative approach in 2021, reflecting the ongoing challenges
  • Increasing activity and investment levels will be vital in providing new opportunities for the supply chain
  • OGUK anticipates that it could take 2-3 years to re-phase and recover the capital activity lost from 2020

Ends

The full report can be found here.

 

OGUK has launched a first-of-its-kind survey that will deliver a baseline for diversity and inclusion (D&I) demographic and sentiment within the sector, and act as an essential catalyst for progress and change.

As the energy mix becomes increasingly integrated, differences of perspective and background will be the key to harnessing the new ideas, disruptive innovations, and future ways of working that will propel us forward. The feedback provided by survey participants will play a pivotal role in promoting D&I, which will be a critical success factor in the industry’s journey towards realising Roadmap 2035.

Craig Shanaghey, President, Operations Services (Europe & Africa) at Wood, and D&I Task Group Chair, said: “The challenges we are facing as an industry require us to collectively think, behave, and act differently. At this critical juncture, we will only be able to turn those challenges into opportunities by unlocking the full potential of our talent pool; by creating the space for diversity of thought and perspective that are essential as we race to keep pace with the fast-changing world around us.

“As a Task Group, we recognise the broad acknowledgement that a move to better D&I means a better employee experience, it means a better culture, and it means better business. But the challenge is about how we drive that change – it is a complex and ever-evolving journey that requires constant focus and effort.

“The results of this survey will give us the much-needed insight to not only understand our collective baseline for diversity and inclusion, but more crucially, to be able to decipher the meaningful and impactful actions that can drive positive change and, ultimately, underpin our delivery of Roadmap 2035.”

OGUK chief executive Deirdre Michie said: “I am delighted to announce the launch of our industry-wide survey on diversity and inclusion. This is an important piece of work that will enable us to really understand where we are as an industry and where we need to get to, in order to attract and retain the talent we need to secure our future by providing solutions to some of the key challenges facing our sector in the short and longer term.

“It will ensure we are shining a spotlight on good examples of D&I practice, as well as initiatives to drive and improve inclusion and diversity.

“If we’re serious about realising the exciting opportunities in the UK energy sector then people must feel empowered to be themselves and this industry must attract and retain diverse people.

“D&I is critical to our efforts in delivering Roadmap 2035 – by fostering a diverse and inclusive working culture, we will secure and retain new talent, bring new perspectives and ideas to the fore and, ultimately, expand supply chain opportunities whilst continuing to contribute to the UK’s vital security of energy supply.”

The anonymised and confidential survey, developed by OGUK’s Diversity and Inclusion Task Group with Robert Gordon University (RGU), will remain open until Thursday, 31 December. It is accessible to all individuals within the oil and gas industry, including those who may recently have retired, or are currently off work or between jobs but are able to share input from their experience at previous organisations. It can be accessed here and via OGUK’s social channels. Results and insights are expected in Q1 2021.

Ends

 

A flagship report released today (Wednesday, November 4) outlines the UK offshore oil and gas industry’s health, safety and environmental performance in 2019, and highlights future plans for further improvement.

The latest findings were revealed by leading representative body OGUK, which today published its first combined report into health, safety and environment data, showing encouraging signs of improvement across a broad range of HSE indicators.

While the findings reveal an increase in total hydrocarbon releases, more serious RIDDOR-reportable releases decreased year-on-year, from 85 to 67. Overall, 49 per cent (62) of all releases were classed as minor, with 10 per cent still to be classified, and three were classified as major releases.

In aviation safety, last year saw a third consecutive year of accident-free flying in the UKCS, and for the second year running, the five-year fatal accident rate per 100, 000 flying hours remained at zero.

The results demonstrate that, overall, 2019 saw stabilised environmental performance, underlining that good management remains a priority alongside continued improvements in this area.

Commenting on the report, OGUK’s health, safety and environment director Trevor Stapleton said:

“The COVID-19 pandemic has had a significant impact on oil and gas operations in the North Sea. However, this virus should not and will not distract industry from focusing on its key goal of maintaining safe operations while continuing to provide the energy society needs – however challenging that might be.

“Understanding our past performance means we can identify areas of strength and areas that need further work and focus our efforts accordingly.

“As an industry, we take any hydrocarbon release very seriously. The UK offshore oil and gas industry’s work to improve safety performance is delivering in many areas – but we must continue our relentless focus on safe operations in every aspect.

“The number of these releases considered reportable under RIDDOR requirements is down year-on-year, but there are signs of an increase in the three-year rolling average. We are working closely with operators and regulators to maintain Principles of Process Safety, and our hydrocarbon release prevention strategies will be refined for next year.

“It is encouraging to see that dangerous occurrences and the non-fatal injury rate both fell to their lowest levels in 2019 and, while a single one is too many, it is a testament to industry that continued focus in these areas has resulted in improvement.”

Mr Stapleton added: “We are taking action and working with the UK government on a major sector deal. The deal will give industry opportunities and guidance on decarbonisation, electrification of assets and the development of carbon capture and storage – all of which will drive down emissions.

“Despite the signs of improvement, there can be no room for complacency and the safety of our workforce remains a key priority for our members.”

The Report can be found at: https://oilandgasuk.co.uk/product/health-safety-environment-report/

 

Ends

 

The shortlist for this year’s prestigious OGUK Awards has been revealed today.

The annual awards ceremony celebrates the brightest and best talent from across the country’s offshore oil and gas industry and finalists represent the hard work, innovation, and collaboration the industry has adopted throughout 2020.

The judging panel, which included OGUK decommissioning manager Joe Leask, executive director of Step Change in Safety Steve Rae and Mark Lammey, Energy Voice editor, nominated thirty individuals and businesses across eight award categories, out of over 90 applications.

The winners will be crowned at OGUK’s first ever virtual awards event on Thursday December 10.

Commenting, OGUK Chief Executive Deirdre Michie OBE said:

“I am delighted to present the shortlist for OGUK’s annual awards. This past year, our industry experienced one of the strongest headwinds we have had yet to face, – but we are pulling through with innovation, collaboration, and determination. This is the North Sea grit we are known for and it enables us to keep providing energy to the UK during this difficult time.

“The finalists represent the excellence the industry has to offer. I’d like to congratulate all of our finalists on their super achievements and wish them the best of luck for the ceremony.”

Further information about the OGUK Awards can be found here: www.ogukawards.co.uk

Ends

The number of workers on offshore oil and gas installations decreased by around 4,000 as the UK went into lockdown in March this year, official figures published by industry body OGUK confirm today. Average weekly personnel on board decreased from around 11,000 on the 8 March to just over 7,000 one month later, with drilling and engineering construction trades hardest hit.

OGUK’s Workforce Insight report 2020 also confirms the uptake of the Coronavirus Job Retention Scheme by companies, particularly in the supply chain, as many positioned themselves to endure the triple whammy of low oil and gas prices and the operational impact of the coronavirus pandemic.

The leading representative body for the sector noted that while official figures on both on and offshore employment would not be available until next year, tentative signs are worrying and underline the need for governments, industry and regulators to work together to protect the jobs and skills that will be needed to meet UK energy needs now and as the country moves to a lower carbon future.

Commenting, report author OGUK workforce engagement and skills manager Dr Alix Thom said:

“Our figures confirm the initial operational impact of the lockdown back in March this year, with the number of workers offshore decreasing considerably in the space of a month as companies reduced to minimum manning in a bid to control the spread.

“Numbers have risen steadily since then as industry has adopted a robust swiss cheese barrier model, with a range of preventative measures in place both prior to mobilisation and whilst offshore, which has helped secure more jobs and increase operations in the immediate term.

“Despite this, we continue to see some very worrying signs for employment in the sector, with the uptake of furlough and continued suppression of global energy demand impacting our industry like many others in the wider economy.

“As our report shows, the recruitment and retention of diverse and talented people will be essential as we work to support UK energy needs both now, and in a lower carbon context. A North Sea Transition Deal, supported by the UK and Scottish governments, can act as a catalyst for this future, and in so doing will provide certainty on the sustainability for the sector in difficult times.”

Transition deal critical for sector as report warns recovery could take years

The leading representative body for the UK offshore oil and gas industry, OGUK, has today (Wednesday, November 11) warned that it could take up to three years to restart many of the projects lost due to the impact of the coronavirus pandemic and commodity price downturn.

The warning comes in its Autumn Snapshot published today, which provides a business outlook for the third quarter of 2020.

The report finds that low sentiment in the outlook of companies continues into 2021, reflecting high levels of uncertainty in the market and reinforcing challenges brought on by Covid-19 are likely to persist.

However, despite the operational difficulties being faced, the industry continues to safely deliver secure and affordable energy, with production levels having remained relatively strong throughout the year.

OGUK’s report reinforces that a North Sea transition deal for this sector is essential in meeting the need for secure, affordable energy to be produced with fewer emissions and to position the UK as a leader in developing low-carbon solutions.

Commenting on the report, OGUK’s market intelligence manager Ross Dornan said:

“New projects and investments are crucial to providing secure energy, sustaining supply chain capabilities, and ensuring the UK is viewed as a good place for these companies to anchor their resources.

“As our Autumn Snapshot shows, it is estimated that companies could continue to take a conservative approach in 2021, reflecting the ongoing challenges of the coronavirus pandemic and the wider economic downturn.

“Securing a North Sea transition deal for this changing industry is critical in ensuring the sector can use its essential skills to help build back better, providing many of the net-zero carbon emissions solutions required for the future.

“At the same time, OGUK’s Recovery Group continues to help shape the sector’s recovery as it takes steps to support the energy transition.

“The current fragile position of many areas of the supply chain means that this future contribution cannot be taken for granted. Industry needs this support now if it is going to be able to deliver later.”

Other indicators show UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019, and drilling activity levels are on their way to becoming the lowest since the early 1970s.

Increasing activity, investment levels, and progress made by OGUK’s recovery group will be vital in providing new opportunities for the supply chain as the industry navigates the transition to a low-carbon future.

 

Key findings:

  • Brent crude averaged just under $41/bbl across the first 10 months of 2020. This is $23/bbl less than the 2019 average and prices at the end of October were at a four-month low ($37/bbl). Market expectations are than price will take time to recover.
  • The average day ahead NBP gas prices in the first 10 months of 2020 was 21.61 pence/therm (p/th), 38 per cent lower than the average for the same period in 2019
  • UK gas demand fell by 16 per cent in Q2 compared with the same period in 2019
  • OGUK members indicate low sentiment levels
  • Companies outline little change in their current outlook for 2021
  • Production has remained relatively strong, however shows a slight reduction of 2.5 per cent so far this year and is around 3 per cent lower than the 2019 full year daily average. This could be expected to recover in Q4 closer to in line with 2019 levels.
  • Fifty-four wells were spudded in the first 10 months of 2020, meaning the year is now almost certain to see the lowest total levels of drilling activity since the early 1970s
  • Only six exploration wells have been spudded so far and it is possible that there will be no further exploration drilling this year
  • Estimated that investors could continue to take a conservative approach in 2021, reflecting the ongoing challenges
  • Increasing activity and investment levels will be vital in providing new opportunities for the supply chain
  • OGUK anticipates that it could take 2-3 years to re-phase and recover the capital activity lost from 2020

Ends

The full report can be found here.

OGUK launches first-of-its-kind D&I survey to drive sector change  

 

OGUK has launched a first-of-its-kind survey that will deliver a baseline for diversity and inclusion (D&I) demographic and sentiment within the sector, and act as an essential catalyst for progress and change.

As the energy mix becomes increasingly integrated, differences of perspective and background will be the key to harnessing the new ideas, disruptive innovations, and future ways of working that will propel us forward. The feedback provided by survey participants will play a pivotal role in promoting D&I, which will be a critical success factor in the industry’s journey towards realising Roadmap 2035.

Craig Shanaghey, President, Operations Services (Europe & Africa) at Wood, and D&I Task Group Chair, said: “The challenges we are facing as an industry require us to collectively think, behave, and act differently. At this critical juncture, we will only be able to turn those challenges into opportunities by unlocking the full potential of our talent pool; by creating the space for diversity of thought and perspective that are essential as we race to keep pace with the fast-changing world around us.

“As a Task Group, we recognise the broad acknowledgement that a move to better D&I means a better employee experience, it means a better culture, and it means better business. But the challenge is about how we drive that change – it is a complex and ever-evolving journey that requires constant focus and effort.

“The results of this survey will give us the much-needed insight to not only understand our collective baseline for diversity and inclusion, but more crucially, to be able to decipher the meaningful and impactful actions that can drive positive change and, ultimately, underpin our delivery of Roadmap 2035.”

OGUK chief executive Deirdre Michie said: “I am delighted to announce the launch of our industry-wide survey on diversity and inclusion. This is an important piece of work that will enable us to really understand where we are as an industry and where we need to get to, in order to attract and retain the talent we need to secure our future by providing solutions to some of the key challenges facing our sector in the short and longer term.

“It will ensure we are shining a spotlight on good examples of D&I practice, as well as initiatives to drive and improve inclusion and diversity.

“If we’re serious about realising the exciting opportunities in the UK energy sector then people must feel empowered to be themselves and this industry must attract and retain diverse people.

“D&I is critical to our efforts in delivering Roadmap 2035 – by fostering a diverse and inclusive working culture, we will secure and retain new talent, bring new perspectives and ideas to the fore and, ultimately, expand supply chain opportunities whilst continuing to contribute to the UK’s vital security of energy supply.”

The anonymised and confidential survey, developed by OGUK’s Diversity and Inclusion Task Group with Robert Gordon University (RGU), will remain open until Thursday, 31 December. It is accessible to all individuals within the oil and gas industry, including those who may recently have retired, or are currently off work or between jobs but are able to share input from their experience at previous organisations. It can be accessed here and via OGUK’s social channels. Results and insights are expected in Q1 2021.

Ends

OGUK flagship report shows industry maintains focus on improving HSE performance in challenging times

 

A flagship report released today (Wednesday, November 4) outlines the UK offshore oil and gas industry’s health, safety and environmental performance in 2019, and highlights future plans for further improvement.

The latest findings were revealed by leading representative body OGUK, which today published its first combined report into health, safety and environment data, showing encouraging signs of improvement across a broad range of HSE indicators.

While the findings reveal an increase in total hydrocarbon releases, more serious RIDDOR-reportable releases decreased year-on-year, from 85 to 67. Overall, 49 per cent (62) of all releases were classed as minor, with 10 per cent still to be classified, and three were classified as major releases.

In aviation safety, last year saw a third consecutive year of accident-free flying in the UKCS, and for the second year running, the five-year fatal accident rate per 100, 000 flying hours remained at zero.

The results demonstrate that, overall, 2019 saw stabilised environmental performance, underlining that good management remains a priority alongside continued improvements in this area.

Commenting on the report, OGUK’s health, safety and environment director Trevor Stapleton said:

“The COVID-19 pandemic has had a significant impact on oil and gas operations in the North Sea. However, this virus should not and will not distract industry from focusing on its key goal of maintaining safe operations while continuing to provide the energy society needs – however challenging that might be.

“Understanding our past performance means we can identify areas of strength and areas that need further work and focus our efforts accordingly.

“As an industry, we take any hydrocarbon release very seriously. The UK offshore oil and gas industry’s work to improve safety performance is delivering in many areas – but we must continue our relentless focus on safe operations in every aspect.

“The number of these releases considered reportable under RIDDOR requirements is down year-on-year, but there are signs of an increase in the three-year rolling average. We are working closely with operators and regulators to maintain Principles of Process Safety, and our hydrocarbon release prevention strategies will be refined for next year.

“It is encouraging to see that dangerous occurrences and the non-fatal injury rate both fell to their lowest levels in 2019 and, while a single one is too many, it is a testament to industry that continued focus in these areas has resulted in improvement.”

Mr Stapleton added: “We are taking action and working with the UK government on a major sector deal. The deal will give industry opportunities and guidance on decarbonisation, electrification of assets and the development of carbon capture and storage – all of which will drive down emissions.

“Despite the signs of improvement, there can be no room for complacency and the safety of our workforce remains a key priority for our members.”

The Report can be found at: https://oilandgasuk.co.uk/product/health-safety-environment-report/

 

Ends

 

OGUK reveals 2020 finalists for annual awards following challenging year for industry

The shortlist for this year’s prestigious OGUK Awards has been revealed today.

The annual awards ceremony celebrates the brightest and best talent from across the country’s offshore oil and gas industry and finalists represent the hard work, innovation, and collaboration the industry has adopted throughout 2020.

The judging panel, which included OGUK decommissioning manager Joe Leask, executive director of Step Change in Safety Steve Rae and Mark Lammey, Energy Voice editor, nominated thirty individuals and businesses across eight award categories, out of over 90 applications.

The winners will be crowned at OGUK’s first ever virtual awards event on Thursday December 10.

Commenting, OGUK Chief Executive Deirdre Michie OBE said:

“I am delighted to present the shortlist for OGUK’s annual awards. This past year, our industry experienced one of the strongest headwinds we have had yet to face, – but we are pulling through with innovation, collaboration, and determination. This is the North Sea grit we are known for and it enables us to keep providing energy to the UK during this difficult time.

“The finalists represent the excellence the industry has to offer. I’d like to congratulate all of our finalists on their super achievements and wish them the best of luck for the ceremony.”

Further information about the OGUK Awards can be found here: www.ogukawards.co.uk

Ends

OGUK report offers first insight into impact of pandemic on offshore jobs

The number of workers on offshore oil and gas installations decreased by around 4,000 as the UK went into lockdown in March this year, official figures published by industry body OGUK confirm today. Average weekly personnel on board decreased from around 11,000 on the 8 March to just over 7,000 one month later, with drilling and engineering construction trades hardest hit.

OGUK’s Workforce Insight report 2020 also confirms the uptake of the Coronavirus Job Retention Scheme by companies, particularly in the supply chain, as many positioned themselves to endure the triple whammy of low oil and gas prices and the operational impact of the coronavirus pandemic.

The leading representative body for the sector noted that while official figures on both on and offshore employment would not be available until next year, tentative signs are worrying and underline the need for governments, industry and regulators to work together to protect the jobs and skills that will be needed to meet UK energy needs now and as the country moves to a lower carbon future.

Commenting, report author OGUK workforce engagement and skills manager Dr Alix Thom said:

“Our figures confirm the initial operational impact of the lockdown back in March this year, with the number of workers offshore decreasing considerably in the space of a month as companies reduced to minimum manning in a bid to control the spread.

“Numbers have risen steadily since then as industry has adopted a robust swiss cheese barrier model, with a range of preventative measures in place both prior to mobilisation and whilst offshore, which has helped secure more jobs and increase operations in the immediate term.

“Despite this, we continue to see some very worrying signs for employment in the sector, with the uptake of furlough and continued suppression of global energy demand impacting our industry like many others in the wider economy.

“As our report shows, the recruitment and retention of diverse and talented people will be essential as we work to support UK energy needs both now, and in a lower carbon context. A North Sea Transition Deal, supported by the UK and Scottish governments, can act as a catalyst for this future, and in so doing will provide certainty on the sustainability for the sector in difficult times.”