New guidelines promoting good practice in robust project delivery published by OGUK today provide companies with a systematic framework for ensuring oil and gas projects are on time and within budget.

Industry experts including operators, contractor companies and the Engineering Construction Industry Training Board (ECITB) have contributed to the guidelines. They cover all stages of a project from initial concept through to commissioning, handover and close out, and are intended for use by project teams, senior management, joint venture partners, project owners, assurance & review teams, supply chain companies and the OGA.

Katy Heidenreich, OGUK’s operations optimisation manager, said:

“Improving how the sector stewards our oil and gas assets is vital to securing a safe and sustainable future for the UK Continental Shelf. These guidelines provide companies with a systematic method for strengthening their processes to achieve repeatable, predictable delivery of oil and gas projects which meet their cost and schedule targets.

The industry’s progress in this area has been recognised by the Oil and Gas Authority in its 2018 ‘UKCS Projects Insights Report’ which indicated that 60 per cent of major projects went into operation on time compared with an historic average of 25 per cent.”

Andy Brown, director, regional operations at Engineering Construction Industry Training Board, said:
“We know the oil and gas industry must improve project delivery and we therefore welcome the new OGUK guidelines, which provide an excellent framework to drive the consistent, predictable and sustainable working practices that are vital to the future success of the sector.

“The ECITB’s Project Collaboration Toolkit shares these goals and is designed to help project leaders create a collaborative approach to improve innovation and efficiency in project delivery across the North Sea.”

OGUK has published a series of guidelines that enable the sharing of industry expertise in support of the OGA’s Asset Stewardship Strategy including the Reserves Progression Tool, all of which aim to drive continuous improvement in performance.

ENDS

In a speech opening OGUK’s inaugural HSE Conference in Aberdeen this morning, OGUK Chief Executive Deirdre Michie said:
Good morning ladies and gentlemen and a warm welcome to our very first OGUK HSE Conference, Health, safety and the environment are at the core of everything we do, both as a major hazard industry and as an industry with people at its heart,
So, I’m delighted that we are building on the success of last year’s Safety30 with another focused event.

I’d like to kick off by thanking our sponsors, who have made today possible, and to thank our impressive list of expert speakers and panellists.
We look forward to hearing and learning from them as to how we can improve our own operations,
Our conference theme is solving tomorrow’s challenges, today.

It’s about exploring how this industry is taking health, safety and environment forward into the next decade.
As you’ll see from your agenda, we will consider a range of issues – the prevention of hydrocarbon releases, control of major accident hazards, emissions reduction and mental health – key areas of what is a very busy and important landscape of priorities for you all.
These are big issues with serious implications for everyone in our industry and so I’m grateful that we have Martin Temple, Chair of the HSE, who will provide an insight into the regulators strategic focus areas.

Many of you will remember Martin gave an excellent speech to Safety30 last year, reflecting on the legacy of Piper Alpha and the impact it has had across other industries as well as our own.Now earlier this year we marked the decade since the helicopter tragedy off the coast of Peterhead, where sixteen lives were lost. As we go about our day to day activities and as we look to the future, we must never forget and we must always remain chronically uneasy to ensure that the unthinkable doesn’t happen.

We do all share that responsibility and the culture we encourage is so important as we look to tomorrow’s challenges.
Not just on health and safety but importantly, in the environment in which we operate,
showing humility because we know we are all fallible and showing leadership in ensuring safe operations and the wellbeing of our people and our environment.

So where is this industry today in terms of H, S and E performance?
Our 2019 Health and Safety report published last week provided an informed view, outlining areas where we must continue to drive action,
And while there are ongoing improvements in aviation safety, there is much more to be done to reduce major hydrocarbon releases,
The downward trend in HCRs shown in a three-year moving average plateaued in 2018,
Meaning that if the rate continues the current trajectory this year there will be an increase – that would be the first in a decade.

It’s a badge we don’t want, and one which we are working hard to avoid,
And so, with our members, the regulator, Step Change in Safety and the MER Asset Integrity Task Group,
OGUK on behalf of industry has developed a robust release prevention plan.

With actions underway or under consideration across people, processes and plant, endorsing principles in process safety leadership, – the first time in my North Sea history that our industry has aligned behind a common set of process leadership principles and I commend all those involved who have got us here.
We are also sharing Good Practice Stories, and, establishing a common way of assuring our barriers to prevent incidents remain fit for purpose,
And always – We should remind ourselves that the report’s findings are not just numbers on a page – they are about ourselves, our colleagues, friends, family.
Which is why I am also really pleased that OGUK is working across industry to improve understanding of mental health. Our review of good practice, based on a survey of members, showed that industry is making progress.
Because as one in four of us will experience a mental health problem each year, it is key that we continue to develop our understanding and response,
Looking to the future this is an industry also focused on its environmental performance and intent on improving it.

While we continue to manage and reduce emissions from production operations, we know there is much more to be done in a world which rightly demands change at an ever-increasing pace. How we step up to this challenge has never been more highly scrutinized. Extinction Rebellion, Greta Thunberg, but also, people like you and me, and our children,
Worried about climate change -rightly – and keen to act, we all have a role to play, personally and professionally. And given our job in providing the energy and industrial products from oil and gas that the UK needs, I can understand why people are looking to us for answers.

Our message remains – we can be, and must be, part of the solution.

Earlier this year we published Roadmap 2035: A Blueprint to Net Zero, which sets out the five key areas requiring collective action from industry, government and regulators to ensure we step forward successfully towards a net zero future,
Helping to deliver net zero by 2045 in Scotland and 2050 in the UK,
By developing people and skills,
Driving technology and innovation,
Growing the economy and exports
And doing it in a way which is safe, sustainable and yes,
Socially acceptable.

And so, in identifying steps to understand and reduce emissions from production operations – the launch of the OGTC’s Net Zero Solutions centre is an excellent example of industry in action to provide a key source of innovative expertise. By bringing industry together with one response and a way forward to adapt and transform and step up to play our part in a net zero world, Roadmap 2035 offers a credible plan of action towards a successful future
It shows the next generation the opportunities this industry can offer. Whether that’s through electrifying the North Sea, developing a hydrogen economy or successfully delivering carbon capture usage and storage solutions – we need to do all of this and at pace.
It’s great we have Sam Coupland who later this afternoon will give an insight into the practical steps BP are taking to advance low carbon in the North Sea,
With an audience of so many professionals here in the room today I hope we can also soak up some of your expertise on the energy transition
Please do come and speak to our membership team at our stand and tell us about the work you are doing in these areas. So, helping us as we continue to engage with governments, regulators and society.

Showing that we are indeed part of the solution.Using our skills, capabilities and our people to unlock a diverse energy mix and be a foundation to a net zero future.
My ask of you all today is to help us promote the Roadmap, to take it into your companies and think about what you’re doing that can put us on track to success,
Indeed, to solve tomorrow’s challenges today,
As Abraham Lincoln said – the best way to predict the future is to create it,
I’d like to open the conference now and get on with hearing from our speakers and kicking off what I hope will be an invigorating day which sparks new ideas,
So, I wish you all a great conference and hope you take a lot from it,
And now it is my great pleasure to welcome on stage, Martin Temple. Chair of the HSE,
Thank you.

“Expanding Frontiers” is the theme for the tenth Offshore Decommissioning Conference, co-hosted by OGUK and Decom North Sea on November 25-27. The event will explore how by achieving step changes in its current mindset, the sector can make the most of potential business opportunities in the UK and global decommissioning markets.

With Forth and Tay Decommissioning as its principal sponsor, the two-day event at the Fairmont Hotel, St Andrews is expected to attract up to 500 people. Delegates will be encouraged by leading UK and international experts to think about new ways to help the sector build on its improving efficiency performance, grow business and support the energy transition.

Commenting, OGUK’s upstream policy director Mike Tholen said:

“Our ability to handle the growth of decommissioning activity that’s occurred over the past decade shows an industry coming of age.  As we will hear at the conference, and the tenth edition of our insight report will show, performance continues to improve with the UK’s decommissioning capability attracting increasing international interest.  There’s an exciting future ahead of us, decommissioning will present new opportunities to reuse old facilities and infrastructure for activities such as carbon capture and storage which will help the UK meet the net zero challenge in years to come.”

Decom North Sea’s chief executive, John Warrender said:

“The North Sea decommissioning market is a world leader. The Offshore Decommissioning Conference’s tenth anniversary is a timely opportunity, not only to reflect on how far the market has come, but also to herald the next generation of decommissioning capability and opportunity. The “Expanding Frontiers” title is apt; it encourages us to share our knowledge, globalise our expertise and build upon the disruptive technologies we’re creating. As the industry matures there’s increasing evidence of a developing market as new commercial models are introduced, aggregating workscopes and achieving economies of scale. This is an evolving industry and we must ensure we are prepared for upcoming challenges.”

Conference delegates will be among the first to hear from regulators including the HSE, OPRED and the OGA about a range of topical issues including recent government consultations on decommissioning and area planning relating to critical UK Continental Shelf infrastructure.

With a newly-introduced conference breakfast on day two, focusing on the government’s Call for Evidence on the UK’s position as a global decom hub, this year’s event also includes a spotlight on international players, the  introduction of a Technology Zone run by the Oil and Gas Technology Centre, a showcase for performance improvements in well decommissioning, plus a session focusing thoughts on how decommissioning will play a key role in the energy transition and future applications within the renewables sector.

ENDS

Following the new that Spirit Energy and partner Dana Petroleum have announced plans to drill a new well at Chestnut, around 125miles north-east of Aberdeen, which could keep it producing as far into the future as 2023,

OGUK’s supply chain director, Matt Abraham, said

“This continued commitment is a strong vote of confidence in the UKCS basin and demonstrates our supply chain expertise in extending the life of North Sea fields.  Realising successes like this in our home markets will be critical as we contribute to the energy transition through Roadmap 2035 and apply our world-leading capabilities both internationally and in other sectors.”

Link to news here

ENDS

Brexit, the growing prominence of private equity investors in the North Sea and decommissioning under scrutiny are among key themes at OGUK’s 2019 legal conference taking place on September 12 at Ardoe House Hotel, Aberdeen.

Offering in-house and private practice lawyers of all levels a deeper awareness of industry’s key issues, the full day event (followed by dinner at the hotel) also promotes knowledge-sharing and networking opportunities across the North Sea legal community.

Sam Dunkley, OGUK’s legal manager, said:

“As the basin continues to adapt to regulatory and political changes and continuing transfers of ownership, it is more useful than ever to bring upstream lawyers together to discuss current and anticipated legal and regulatory developments.

“Included in our packed agenda is an Oil and Gas Authority update on its evolving approach to regulation for Maximising Economic Recovery from the UKCS (MERUK) and the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) will share its views regarding financial capability for decommissioning.

There’ll be a focus on joint operating agreement (JOA) disputes, an introduction to the new model Sale and Purchase agreement being produced by the Association of International Petroleum Negotiators (AIPN) and case law updates.  We also have a panel discussion, an icebreaker and a final Q&A – seeking to make this event more interactive than ever.

“We’re very grateful to our principal sponsor CMS and supporting sponsor Clyde & Co for their support in helping us offer delegates an exciting and engaging one day event as the sector’s leading legal conference.”

The full agenda can be found here .

 

ENDS

A new tool aimed at providing operators and licensees with a framework to re-evaluate methods to improve recovery from existing North Sea oil and gas assets is launched today (Aug 21) on the OGUK website. Developed through industry collaboration, the tool provides a detailed process for identifying opportunities to learn from industry-leading practice.

An industry task group supporting the Oil and Gas Authority’s Asset Stewardship Task Force, created the Reserves Progression self-verification check-list tool to promote good practice, and information-sharing. Using it will help operators improve overall recovery rates and extend the productive life of the UK Continental Shelf.

Co-chair of the task group, Katy Heidenreich, said:

“Current data shows there are over 2 billion barrels of oil equivalent (boe) in near-field opportunities that could potentially be unlocked through the promotion of good practice and innovation.  Many of these opportunities may be marginal, technically difficult and geologically complex; this tool gives industry a consistent, integrated and systematic approach to progressing these resources and reserves. Improving our stewardship of these assets and collectively finding ways to increase the UKCS recovery factor from 43% means there’s an opportunity to add many millions of extra barrels of vital production using our existing infrastructure.”

Fellow co-chair, Tony McGarva, said:

“Companies can use the Reserves Progression checklist to identify, review and re-evaluate the potential opportunities for increasing oil and gas recovery in all aspects of their activities including reservoir management, well and production systems, and reassess where processes could be refined to unlock otherwise undeveloped reserves. With industry experts collaborating to develop this tool, it’s designed to be easily incorporated into current processes so helping to drive continuous improvement in performance.”

Scott Robertson, Co-Chair of Asset Stewardship Taskforce and Area Manager, Central North Sea for the Oil & Gas Authority said:

“The OGA has previously highlighted the 2bn boe resource prize that exists within existing producing fields, and I’m delighted that a small group of experts in progressing resource opportunities have combined their experience to develop this self-assessment tool.

“The tool incorporates good practices and leading behaviours, and operators will be able to use this tool to determine whether their organisations, processes, and procedures are set up to deliver oil and gas opportunities consistent with those operators who already do it well.”

The tool can be found here 

ENDS

Commenting on news that Equinor has today started up production from its Mariner field, OGUK Upstream Policy Director Mike Tholen said

“First oil from Mariner represents a significant achievement for Equinor and its pioneering development of the field, helping the company to become a major player in the UK sector of the North Sea with a long-lasting, positive impact on the region.

“As the largest offshore development in the UK for a decade, Mariner has utilised pioneering technology to bring on stream a field first discovered nearly 40 years ago. In doing so it has provided thousands of highly skilled jobs across the country during its development and will support many more in the years to come.

“The Mariner field will contribute towards energy security for the next 30 years. With up to three billion barrels of oil in place, it contributes to industry’s shared ambition Vision 2035 – which looks to meet as much of the UK’s oil and gas needs from home-produced resources as possible.”

ENDS

Industry’s focus on improving its competitiveness and playing its part in the move towards a new and lower carbon energy mix forms the core of OGUK’s 2019 annual conference on June 4-5, focusing on ‘An Industry in Transition’.

The programme for the event supported by principal sponsor, Total E&P UK Limited, at Aberdeen’s Exhibition and Conference Centre, features a diverse line-up of leading figures from across the sector who’ll consider how, from three different perspectives, energy, people and business, the industry is transitioning.

Deirdre Michie, OGUK’s chief executive, said:

“Finding new ways of working, promoting smarter use of technology and driving efficiency remain critical to the competitiveness of North Sea oil and gas production, supporting our aim of meeting as much of the UK’s energy needs as possible from our domestic resources. This industry is also actively involved in enabling the transition towards a lower carbon energy mix. Our ability to achieve these two goals depends on the skills and experience of our people today and tomorrow and the strategies we have in place to ensure existing and future generations develop the skills that equip us for the future.”

Key industry leaders Ariel Flores, BP; Dave Stewart, Wood and John Pearson from Petrofac will chair three separate business transition sessions. These will focus on efforts to accelerate the transition, better ways to unlock the UK North Sea’s potential together with the industry’s Efficiency Task Force and a session examining the impact of technology in delivering efficiency improvements.

The topics of workforce engagement and culture plus oil and gas skills development will feature in the people transition discussions. These include one led by John McDonald, OPITO plus additional activities aimed at encouraging new talent with transferable skills across different energy sectors.

Colette Cohen from the Oil and Gas Technology Centre (OGTC) will chair discussions on transformational technologies in the energy transition, while Roger Esson, OGTC will focus thoughts on the role of diversification within the sector with input from organisations including Scottish Renewables, represented by Claire Mack.

Vision 2035, the industry’s ambition to add at least another generation of productive life to the UK North Sea and expand supply chain opportunities will feature in the energy transition session which will feature input from John Pearson, Petrofac; Graham Bennett, DNVGL and Bjorn Johansen from Equinor.

More than 500 people attended OGUK’s conference last year – with leading figures from industry, government, the regulators, academic and other trade associations, and this year the event is also supported by Stratasys GmbH and Larsen & Toubro Infotech Ltd.

Places can be booked here.

 

Ends

From left: Matt Abraham, Rebecca Groundwater and Karis Thain

The leading representative body for the UK’s offshore oil and gas industry will next week head to a major international conference to champion the sector. OGUK’s supply chain director, Matt Abraham, will chair a sell-out business breakfast on May 7 during the Offshore Technology Conference in Houston, Texas.

With major global companies making room for newer operators on the UK Continental Shelf (UKCS), Matt will encourage an international panel of experts from companies including Simmons Energy, Wood Mackenzie, Burness Paull, Findlay Anderson, Baker Hughes GE and Baker Botts to consider the changing dynamics and potential opportunities for the supply chain.

Matt Abraham, OGUK’s supply chain director, said:

“We recognise we’re in a new reality, where it’s vital to embrace innovative business models and work co-operatively and the hard-won benefits of adopting this mindset are beginning to show. Sharpening our focus on efficiency improvements is enabling us to gain critical mass across the industry to help unlock new UKCS projects and hone our supply chain’s competitiveness so OTC provides the ideal platform to showcase these world-class capabilities.”

Matt will be joining OGUK’s membership relations manager, Karis Thain and lead external affairs adviser, Rebecca Groundwater in representing member companies and connecting with industry partners and stakeholders to gain deeper insight of the international opportunities available to the UK supply chain.

­“The UK supply chain has developed such competitive capabilities and skills, we believe it has a great opportunity to grow business in international markets and benefit from diversifying into other sectors,” added Mr Abraham.

ENDS

A sustained focus on cost and efficiencies with ongoing uncertainty in commodity markets marks the “new reality” for the UK’s offshore oil and gas sector, according to a flagship report into industry performance published today (Wednesday 20 March).

Oil & Gas UK’s (OGUK) Business Outlook 2019 finds continued uncertainty in commodity markets is reinforcing investor caution, with forecasts indicating a conservative outlook for prices. Against this backdrop, exploration and production companies remain focused on cost whilst striving for further business and operational improvements.

While the report finds 62 percent of contractor companies have an improved outlook for 2019, many areas of the supply chain are still experiencing challenges as industry emerges from one of its most difficult downturns.

New findings in the report reveal that £200bn will need to be spent by exploration and production companies in existing operations and new opportunities to realise industry’s Vision 2035, and adding a generation of productive life to the basin.

The report shows:

  • Production has increased by 20 percent over the past five years, following 14 years of decline.
  • Companies are looking to maintain unit operating costs at current levels, with operating expenditure running at around £7-7.5bn through 2019
  • Momentum is building around exploration activity, with up to 15 exploration wells expected in 2019, including several potentially high-impact prospects
  • Supply chain revenues are anticipated to stabilise aided by new capital approvals and operational investment, however pressures remain in some areas of the supply chain
  • The largest ten E&P companies accounted for just over half of production in 2018 compared to more than two-thirds in 2008, reflecting an increasingly diverse corporate landscape
  • Production from the UKCS continues to provide around 60 percent of the UK’s oil and gas demand reducing reliance on imports
  • Drilling activity – key to progressing resources to production – remains at a record-low rate
  • Despite the low level of activity, up to 485 million boe have been discovered so far from exploration wells drilled in 2018 – a similar total to discovered volumes in Norway but with 20 fewer wells
  • More new projects were approved in 2018 than the previous three years combined, unlocking over £3.3 billion of new capital investment and more than 400 million boe of new reserves – a similar number are expected in 2019
  • Around £200 billion will need to be spent to add a generation of productive life to the basin, providing significant opportunities for both supply chain and E&P companies.

Commenting, OGUK Chief Executive Deirdre Michie said:

“Our Business Outlook Report 2019 shows that industry’s approach during the downturn is delivering results. Following 14 years of decline, production has increased by a fifth over the past five years.  Cost improvements are being sustained and there is building momentum around exploration, with more new opportunities being drilled and the largest two conventional discoveries for a decade made in the second half of 2018.

“Our report finds an industry that’s getting better at what it does, getting smarter in how it does it and is well positioned to deliver attractive returns on investment within this environment, maintaining our global competitiveness. This is the new reality and we need to embrace it.

“However, challenges remain across parts of the supply chain, with revenues and margins still under pressure and cash flow stretched. If capabilities and resources are to stay anchored here in the UK, there must be a competitive proposition for supply chain companies to invest in too.

“With focus on adding a generation of productive life to the basin, our report reveals around £200 billion will need to be spent to find, develop and operate the reserves of the future.

“In a year in which output from the UK Continental Shelf met around 60 percent of primary UK oil and gas demand, the importance of our hard-fought investment conditions is reinforced – not only for our industry but for the UK economy.

“This is a UK industry which is critical for security of energy supply, at the heart of the move to a lower carbon economy, supports hundreds of thousands of jobs and contributes billions to the economy.

“With the new reality clear and clarity around the future potential, there is all to play for.”

Ends

The leading representative body for the UK’s offshore oil and gas industry has welcomed the Chancellor’s Spring Statement today.

Independent OBR figures published today demonstrate that the industry will contribute £8.5 billion in direct taxes to the Exchequer over the next five years and will continue to provide around half the nation’s oil and gas needs.

The government further launched the call for evidence on strengthening the UK’s offshore oil and gas decommissioning industry.

Speaking in response to the Spring Statement and call for evidence launch, Oil & Gas UK Chief Executive Deirdre Michie said:

“At a time when industry continues to face many uncertainties, fiscal and regulatory stability are key enablers to help the offshore industry realise the opportunities for decades to come in the North Sea.

“The £8.5 billion in direct taxes adds to the £350 billion already contributed over the last five decades. It reinforces the continued importance of our industry to the wider UK economy, supporting over 280,000 jobs, many of them highly skilled, and providing security of energy supply.

“We look forward to continuing our collaborative engagement with HMT and BEIS on the decommissioning call for evidence. The UK is leading the way as a decommissioning centre of excellence through both effective cost leadership and technical expertise. Working closely, we can together create an enduring benefit to both our world-class supply chain and the nation.”

 

 

ENDS

In response to the “Projections of UK Oil and Gas Production and Expenditure Report” published today by the Oil and Gas Authority, which says oil and gas production in the UK increased by more than 4% in 2018, Oil & Gas UK’s (OGUK) Upstream Policy Director, Mike Tholen said:

 

“This demonstrates that the approaches and strategies of exploration and production companies are paying off and we look forward to shedding more light on this when OGUK publishes our Business Outlook later this month.

 

“This is a significant milestone for an industry emerging from one of the toughest downturns in memory. However, in a competitive global market where the competition for investment is intense, it remains critical to maintain the fiscal and regulatory conditions which have supported this solid production performance delivered by industry.

 

“The UK’s offshore industry has a significant role to play enabling the transition to a lower carbon economy, part of that is ensuring we meet as much as possible of the national demand for oil and gas from domestic resources rather than from imports. Maintaining investment in our industry will be critical to our efforts to realise the full potential of the basin as outlined in Vision 2035.”

 

The report is available here

 

ENDS

 

Aberdeen,Friday 2nd November 2018
Pictured is ”The Oil Industry’s Best Kep Secret” Event at Spirit Energy, Aberdeen
Picture by Euan Duff / Abermedia

A leading advocate for diversity and inclusion in the offshore oil and gas industry will give a keynote speech on UK efforts at a prestigious international drilling conference later this week.

Katy Heidenreich, Upstream Operations Optimisations Manager at Oil & Gas UK, will address a special diversity and inclusion session at the SPE-IADC Drilling Conference being held at World Forum, the Hague, from 3 to 5 March.

Dubbed as the world’s premier drilling event, the conference attracts international operator companies, contractor firms and service companies to address challenges and deliver improved performance.

Speaking ahead of the conference, Katy Heidenreich said:

“This is an important opportunity to reflect on efforts to improve diversity and inclusion in our industry on an international stage. Since the launch of my book I’ve been overwhelmed by support from the UK’s offshore oil and gas industry as well as wider bodies responsible for promoting skills development.”

Responsible for promoting operational excellence and driving initiatives that align with the Maximising Economic Recovery Strategy, Katy has spent most of her career in the oil and gas industry working in technical and senior management roles in the UK, Norway and Azerbaijan. Katy also recently became a published author, releasing a book supported by OGUK focusing on the impact women have had on the oil and gas sector.

Katy Heidenreich adds:

“We know that meaningful diversity and inclusion has a real impact on companies bottom line, with reports showing gender diverse companies are 15 percent more likely to financially outperform those in the bottom quartile. For ethnically diverse companies this goes up to 35 percent and clearly demonstrates that diversity and inclusion is key in our efforts improve the competitiveness of the UK Continental Shelf.

“I look forward to shining a light on some of the great initiatives being led by UK companies to improve diversity and inclusion, and to learning about what more we can do to drive equality of opportunity.”

Ends

The leading representative body for the UK’s offshore oil and gas industry has today welcomed news INEOS is to invest £500m in the Forties Pipeline System as a vote of confidence in the future potential of the industry.

INEOS said today that the investment will transform the asset and extend the life of the pipeline by at least twenty years.

Commenting, Oil & Gas UK upstream policy director Mike Tholen said:

“Investment of this scale in the Forties pipeline system is a vote of confidence in the future potential of the UK North Sea. The rejuvenation of this critical infrastructure, embedded at the heart of industry for nearly 40 years, strengthens our aim to add another generation of productive life to the basin outlined in Vision 2035.

“The modernisation programme will provide operators with a greater degree of certainty when making investment decisions about the future development plans for their assets’.

 

ENDS

Oil & Gas UK has today welcomed the publication of the 2017 reconciliation report of the UK Extractive Industries Transparency Initiative (EITI), which confirmed the quality and integrity of the industry’s contribution to the UK economy.  EITI is a voluntary global standard, which promotes open and accountable management of natural resources through the reconciliation and disclosure of the revenues paid/received for a country’s natural resources between companies and the government.

Commenting on the report, Oil & Gas UK Fiscal Policy Manager Romina Mele-Cornish said:

“The 2017 EITI report shows that extractive industries added £22 billion in value to the UK economy, the vast proportion of which was delivered by the activities of the UK’s oil and gas industry. Even during the depth of the downturn, the report found that industry contributed £847 million in direct taxes to the Exchequer, adding to the £350 billion (in today’s money) already contributed over the last five decades.

“The report also highlights the continued importance of our industry to the wider UK economy, supporting over 200,000 jobs, many of them highly skilled, and providing security of energy supply.

“All our member companies in-scope of EITI have actively participated in the 2017 reconciliation.  This reflects industry’s commitment to this voluntary scheme in what is an important year for UK EITI as we progress through the international validation process.”

The report can be found here

Ends

Commenting on CNOOC’s announcement regarding a new gas discovery on the Glengorm prospect, Oil & Gas UK’s market intelligence manager, Ross Dornan, said:

“This is a major find and a great example of partner companies, CNOOC International, Total E&P and Edison working together to explore and unlock the potential of the UK Continental Shelf UKCS). Glengorm was a challenging prospect to drill, however the combined determination and perseverance of the partners has paid off. The location of the discovery, in the central North Sea, also provides a valuable opportunity to make use of the UKCS’ extensive infrastructure network.

Coming so soon after the Glendronach discovery in September, Glengorm is a major milestone towards adding another generation of productive life to the UK North Sea and realising the ambition of Vision 2035.”

 

ENDS

Oil & Gas UK Chief Executive Deirdre Michie said:

“A deal outcome is in the best interests of this industry, which is critical for security of energy supply and supports hundreds of thousands of skilled jobs right across the UK.

“We will continue to work with all parties and governments to inform the debate and encourage a constructive and timely approach to securing a deal which achieves the priorities identified by industry and can command the necessary political support.”

Our identified priorities are:

  1. Protecting the offshore industry from future EU regulatory changes.
  2. Minimal friction between the UK and EU.
  3. Maintaining a strong voice in Europe.
  4. Protecting energy trading and the internal energy market.
  5. Protecting our licence to operate.

The National Decommissioning Centre (NDC), a global technology R&D hub, was opened today by Lord Duncan, UK Government Minister for Scotland and Paul Wheelhouse MSP, Scottish Energy Minister in Newburgh in Aberdeenshire.

Oil & Gas UK’s chief executive, Deirdre Michie, said:

“The launch of the National Decommissioning Centre makes clear our ambition to become a trail-blazer in decommissioning.

The UK’s oil and gas industry is renowned across the globe thanks to its dynamic supply chain and expert capabilities.

With first mover advantage in the global decommissioning market and clear support from the government, regulators and industry, this exciting new facility will play a key role in driving our ambitions forward.”

More information about the centre is available here 

 

 

 

Report signals fresh investment for the UKCS in 2019

 

Commenting on the WoodMac report released today (Tuesday, January 8), which highlights five themes for the industry in 2019, including North Sea exploration and project investment, Mike Tholen, Oil & Gas UK’s Upstream Policy Director, said:

 

“This report builds on our analysis showing the positive future ahead if we continue to strive towards Vision 2035. OGUK will add more detail on the many exciting future opportunities for our industry in our flagship Business Outlook Report to be published in March this year.

 

“We have already seen the sector delivering improved performance, securing more project approvals in 2018 than in the last three years combined. Our challenge is to build on our successes to generate increased exploration activity.

 

“This is why we remain unwavering in our commitment to Vision 2035 which aims to add a generation of productive life to the basin and expand the supply chain’s global footprint.”

ENDS

 

Oil & Gas UK’s subsidiary LOGIC (Leading Oil & Gas Industry Competitiveness), publishes a new standard contract today (18 December) aimed at helping companies committed to delivering offshore decommissioning excellence. The standardisation of legal contracts, spearheaded by LOGIC in partnership with industry, improves the efficiency of drafting, executing and negotiating commercial agreements.

The not-for-profit organisation, which next year marks its 20th anniversary, continues to play a key role in helping companies improve competitiveness by simplifying transactional processes in the offshore oil and gas industry. More than 24,000 downloads of LOGIC’s suite of Standard Contracts have been recorded globally since April 2014.

Commenting, Graham Elgie, Managing Director of LOGIC said:

“This model contract developed by Oil & Gas UK’s Legal Issues Forum provides companies and their contractors with a framework for working towards commercial agreements in a timely, co-operative and effective manner. This couldn’t have been achieved without the support and expertise provided by industry, particularly the members on our Decommissioning Task Finish Group.

“Parties using this new model contract can reduce bidding costs, eliminate duplication of effort and streamline business processes enabling the UK to build on our growing reputation for effective cost leadership in decommissioning.”

The general conditions of contract for offshore decommissioning covers complete decommissioning of infrastructure, from cessation of production to delivery of structures to shore. It is available from the LOGIC website

In addition to the General Conditions of Contract for Offshore Decommissioning, LOGIC’s other Standard Contracts comprise:

  1. Construction Edition 2
  2. Design Edition 2
  3. Marine Construction Edition 2
  4. Mobile Drilling Rigs Edition 1
  5. Purchase of Goods Edition 3
  6. Services (On- and Offshore) Edition 3
  7. SME Services Edition 1
  8. Subcontract for SME Services Edition 1
  9. Supply of Major Items of Plant and Equipment Edition 3
  10. Well Services Edition 2

ENDS

New guidelines to drive systematic project delivery improvements

New guidelines promoting good practice in robust project delivery published by OGUK today provide companies with a systematic framework for ensuring oil and gas projects are on time and within budget.

Industry experts including operators, contractor companies and the Engineering Construction Industry Training Board (ECITB) have contributed to the guidelines. They cover all stages of a project from initial concept through to commissioning, handover and close out, and are intended for use by project teams, senior management, joint venture partners, project owners, assurance & review teams, supply chain companies and the OGA.

Katy Heidenreich, OGUK’s operations optimisation manager, said:

“Improving how the sector stewards our oil and gas assets is vital to securing a safe and sustainable future for the UK Continental Shelf. These guidelines provide companies with a systematic method for strengthening their processes to achieve repeatable, predictable delivery of oil and gas projects which meet their cost and schedule targets.

The industry’s progress in this area has been recognised by the Oil and Gas Authority in its 2018 ‘UKCS Projects Insights Report’ which indicated that 60 per cent of major projects went into operation on time compared with an historic average of 25 per cent.”

Andy Brown, director, regional operations at Engineering Construction Industry Training Board, said:
“We know the oil and gas industry must improve project delivery and we therefore welcome the new OGUK guidelines, which provide an excellent framework to drive the consistent, predictable and sustainable working practices that are vital to the future success of the sector.

“The ECITB’s Project Collaboration Toolkit shares these goals and is designed to help project leaders create a collaborative approach to improve innovation and efficiency in project delivery across the North Sea.”

OGUK has published a series of guidelines that enable the sharing of industry expertise in support of the OGA’s Asset Stewardship Strategy including the Reserves Progression Tool, all of which aim to drive continuous improvement in performance.

ENDS

Industry conference looks to future on health, safety and environment

In a speech opening OGUK’s inaugural HSE Conference in Aberdeen this morning, OGUK Chief Executive Deirdre Michie said:
Good morning ladies and gentlemen and a warm welcome to our very first OGUK HSE Conference, Health, safety and the environment are at the core of everything we do, both as a major hazard industry and as an industry with people at its heart,
So, I’m delighted that we are building on the success of last year’s Safety30 with another focused event.

I’d like to kick off by thanking our sponsors, who have made today possible, and to thank our impressive list of expert speakers and panellists.
We look forward to hearing and learning from them as to how we can improve our own operations,
Our conference theme is solving tomorrow’s challenges, today.

It’s about exploring how this industry is taking health, safety and environment forward into the next decade.
As you’ll see from your agenda, we will consider a range of issues – the prevention of hydrocarbon releases, control of major accident hazards, emissions reduction and mental health – key areas of what is a very busy and important landscape of priorities for you all.
These are big issues with serious implications for everyone in our industry and so I’m grateful that we have Martin Temple, Chair of the HSE, who will provide an insight into the regulators strategic focus areas.

Many of you will remember Martin gave an excellent speech to Safety30 last year, reflecting on the legacy of Piper Alpha and the impact it has had across other industries as well as our own.Now earlier this year we marked the decade since the helicopter tragedy off the coast of Peterhead, where sixteen lives were lost. As we go about our day to day activities and as we look to the future, we must never forget and we must always remain chronically uneasy to ensure that the unthinkable doesn’t happen.

We do all share that responsibility and the culture we encourage is so important as we look to tomorrow’s challenges.
Not just on health and safety but importantly, in the environment in which we operate,
showing humility because we know we are all fallible and showing leadership in ensuring safe operations and the wellbeing of our people and our environment.

So where is this industry today in terms of H, S and E performance?
Our 2019 Health and Safety report published last week provided an informed view, outlining areas where we must continue to drive action,
And while there are ongoing improvements in aviation safety, there is much more to be done to reduce major hydrocarbon releases,
The downward trend in HCRs shown in a three-year moving average plateaued in 2018,
Meaning that if the rate continues the current trajectory this year there will be an increase – that would be the first in a decade.

It’s a badge we don’t want, and one which we are working hard to avoid,
And so, with our members, the regulator, Step Change in Safety and the MER Asset Integrity Task Group,
OGUK on behalf of industry has developed a robust release prevention plan.

With actions underway or under consideration across people, processes and plant, endorsing principles in process safety leadership, – the first time in my North Sea history that our industry has aligned behind a common set of process leadership principles and I commend all those involved who have got us here.
We are also sharing Good Practice Stories, and, establishing a common way of assuring our barriers to prevent incidents remain fit for purpose,
And always – We should remind ourselves that the report’s findings are not just numbers on a page – they are about ourselves, our colleagues, friends, family.
Which is why I am also really pleased that OGUK is working across industry to improve understanding of mental health. Our review of good practice, based on a survey of members, showed that industry is making progress.
Because as one in four of us will experience a mental health problem each year, it is key that we continue to develop our understanding and response,
Looking to the future this is an industry also focused on its environmental performance and intent on improving it.

While we continue to manage and reduce emissions from production operations, we know there is much more to be done in a world which rightly demands change at an ever-increasing pace. How we step up to this challenge has never been more highly scrutinized. Extinction Rebellion, Greta Thunberg, but also, people like you and me, and our children,
Worried about climate change -rightly – and keen to act, we all have a role to play, personally and professionally. And given our job in providing the energy and industrial products from oil and gas that the UK needs, I can understand why people are looking to us for answers.

Our message remains – we can be, and must be, part of the solution.

Earlier this year we published Roadmap 2035: A Blueprint to Net Zero, which sets out the five key areas requiring collective action from industry, government and regulators to ensure we step forward successfully towards a net zero future,
Helping to deliver net zero by 2045 in Scotland and 2050 in the UK,
By developing people and skills,
Driving technology and innovation,
Growing the economy and exports
And doing it in a way which is safe, sustainable and yes,
Socially acceptable.

And so, in identifying steps to understand and reduce emissions from production operations – the launch of the OGTC’s Net Zero Solutions centre is an excellent example of industry in action to provide a key source of innovative expertise. By bringing industry together with one response and a way forward to adapt and transform and step up to play our part in a net zero world, Roadmap 2035 offers a credible plan of action towards a successful future
It shows the next generation the opportunities this industry can offer. Whether that’s through electrifying the North Sea, developing a hydrogen economy or successfully delivering carbon capture usage and storage solutions – we need to do all of this and at pace.
It’s great we have Sam Coupland who later this afternoon will give an insight into the practical steps BP are taking to advance low carbon in the North Sea,
With an audience of so many professionals here in the room today I hope we can also soak up some of your expertise on the energy transition
Please do come and speak to our membership team at our stand and tell us about the work you are doing in these areas. So, helping us as we continue to engage with governments, regulators and society.

Showing that we are indeed part of the solution.Using our skills, capabilities and our people to unlock a diverse energy mix and be a foundation to a net zero future.
My ask of you all today is to help us promote the Roadmap, to take it into your companies and think about what you’re doing that can put us on track to success,
Indeed, to solve tomorrow’s challenges today,
As Abraham Lincoln said – the best way to predict the future is to create it,
I’d like to open the conference now and get on with hearing from our speakers and kicking off what I hope will be an invigorating day which sparks new ideas,
So, I wish you all a great conference and hope you take a lot from it,
And now it is my great pleasure to welcome on stage, Martin Temple. Chair of the HSE,
Thank you.

Industry conference expands frontiers to drive new direction in decommissioning mindset

“Expanding Frontiers” is the theme for the tenth Offshore Decommissioning Conference, co-hosted by OGUK and Decom North Sea on November 25-27. The event will explore how by achieving step changes in its current mindset, the sector can make the most of potential business opportunities in the UK and global decommissioning markets.

With Forth and Tay Decommissioning as its principal sponsor, the two-day event at the Fairmont Hotel, St Andrews is expected to attract up to 500 people. Delegates will be encouraged by leading UK and international experts to think about new ways to help the sector build on its improving efficiency performance, grow business and support the energy transition.

Commenting, OGUK’s upstream policy director Mike Tholen said:

“Our ability to handle the growth of decommissioning activity that’s occurred over the past decade shows an industry coming of age.  As we will hear at the conference, and the tenth edition of our insight report will show, performance continues to improve with the UK’s decommissioning capability attracting increasing international interest.  There’s an exciting future ahead of us, decommissioning will present new opportunities to reuse old facilities and infrastructure for activities such as carbon capture and storage which will help the UK meet the net zero challenge in years to come.”

Decom North Sea’s chief executive, John Warrender said:

“The North Sea decommissioning market is a world leader. The Offshore Decommissioning Conference’s tenth anniversary is a timely opportunity, not only to reflect on how far the market has come, but also to herald the next generation of decommissioning capability and opportunity. The “Expanding Frontiers” title is apt; it encourages us to share our knowledge, globalise our expertise and build upon the disruptive technologies we’re creating. As the industry matures there’s increasing evidence of a developing market as new commercial models are introduced, aggregating workscopes and achieving economies of scale. This is an evolving industry and we must ensure we are prepared for upcoming challenges.”

Conference delegates will be among the first to hear from regulators including the HSE, OPRED and the OGA about a range of topical issues including recent government consultations on decommissioning and area planning relating to critical UK Continental Shelf infrastructure.

With a newly-introduced conference breakfast on day two, focusing on the government’s Call for Evidence on the UK’s position as a global decom hub, this year’s event also includes a spotlight on international players, the  introduction of a Technology Zone run by the Oil and Gas Technology Centre, a showcase for performance improvements in well decommissioning, plus a session focusing thoughts on how decommissioning will play a key role in the energy transition and future applications within the renewables sector.

ENDS

OGUK comments on Spirit Energy’s £140 million investment in Chestnut Field

Following the new that Spirit Energy and partner Dana Petroleum have announced plans to drill a new well at Chestnut, around 125miles north-east of Aberdeen, which could keep it producing as far into the future as 2023,

OGUK’s supply chain director, Matt Abraham, said

“This continued commitment is a strong vote of confidence in the UKCS basin and demonstrates our supply chain expertise in extending the life of North Sea fields.  Realising successes like this in our home markets will be critical as we contribute to the energy transition through Roadmap 2035 and apply our world-leading capabilities both internationally and in other sectors.”

Link to news here

ENDS

Timely insight on Brexit and other topical issues at industry legal conference

Brexit, the growing prominence of private equity investors in the North Sea and decommissioning under scrutiny are among key themes at OGUK’s 2019 legal conference taking place on September 12 at Ardoe House Hotel, Aberdeen.

Offering in-house and private practice lawyers of all levels a deeper awareness of industry’s key issues, the full day event (followed by dinner at the hotel) also promotes knowledge-sharing and networking opportunities across the North Sea legal community.

Sam Dunkley, OGUK’s legal manager, said:

“As the basin continues to adapt to regulatory and political changes and continuing transfers of ownership, it is more useful than ever to bring upstream lawyers together to discuss current and anticipated legal and regulatory developments.

“Included in our packed agenda is an Oil and Gas Authority update on its evolving approach to regulation for Maximising Economic Recovery from the UKCS (MERUK) and the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) will share its views regarding financial capability for decommissioning.

There’ll be a focus on joint operating agreement (JOA) disputes, an introduction to the new model Sale and Purchase agreement being produced by the Association of International Petroleum Negotiators (AIPN) and case law updates.  We also have a panel discussion, an icebreaker and a final Q&A – seeking to make this event more interactive than ever.

“We’re very grateful to our principal sponsor CMS and supporting sponsor Clyde & Co for their support in helping us offer delegates an exciting and engaging one day event as the sector’s leading legal conference.”

The full agenda can be found here .

 

ENDS

New industry tool to improve recovery from existing North Sea fields

A new tool aimed at providing operators and licensees with a framework to re-evaluate methods to improve recovery from existing North Sea oil and gas assets is launched today (Aug 21) on the OGUK website. Developed through industry collaboration, the tool provides a detailed process for identifying opportunities to learn from industry-leading practice.

An industry task group supporting the Oil and Gas Authority’s Asset Stewardship Task Force, created the Reserves Progression self-verification check-list tool to promote good practice, and information-sharing. Using it will help operators improve overall recovery rates and extend the productive life of the UK Continental Shelf.

Co-chair of the task group, Katy Heidenreich, said:

“Current data shows there are over 2 billion barrels of oil equivalent (boe) in near-field opportunities that could potentially be unlocked through the promotion of good practice and innovation.  Many of these opportunities may be marginal, technically difficult and geologically complex; this tool gives industry a consistent, integrated and systematic approach to progressing these resources and reserves. Improving our stewardship of these assets and collectively finding ways to increase the UKCS recovery factor from 43% means there’s an opportunity to add many millions of extra barrels of vital production using our existing infrastructure.”

Fellow co-chair, Tony McGarva, said:

“Companies can use the Reserves Progression checklist to identify, review and re-evaluate the potential opportunities for increasing oil and gas recovery in all aspects of their activities including reservoir management, well and production systems, and reassess where processes could be refined to unlock otherwise undeveloped reserves. With industry experts collaborating to develop this tool, it’s designed to be easily incorporated into current processes so helping to drive continuous improvement in performance.”

Scott Robertson, Co-Chair of Asset Stewardship Taskforce and Area Manager, Central North Sea for the Oil & Gas Authority said:

“The OGA has previously highlighted the 2bn boe resource prize that exists within existing producing fields, and I’m delighted that a small group of experts in progressing resource opportunities have combined their experience to develop this self-assessment tool.

“The tool incorporates good practices and leading behaviours, and operators will be able to use this tool to determine whether their organisations, processes, and procedures are set up to deliver oil and gas opportunities consistent with those operators who already do it well.”

The tool can be found here 

ENDS

Mariner start up represents significant achievement for Equinor

Commenting on news that Equinor has today started up production from its Mariner field, OGUK Upstream Policy Director Mike Tholen said

“First oil from Mariner represents a significant achievement for Equinor and its pioneering development of the field, helping the company to become a major player in the UK sector of the North Sea with a long-lasting, positive impact on the region.

“As the largest offshore development in the UK for a decade, Mariner has utilised pioneering technology to bring on stream a field first discovered nearly 40 years ago. In doing so it has provided thousands of highly skilled jobs across the country during its development and will support many more in the years to come.

“The Mariner field will contribute towards energy security for the next 30 years. With up to three billion barrels of oil in place, it contributes to industry’s shared ambition Vision 2035 – which looks to meet as much of the UK’s oil and gas needs from home-produced resources as possible.”

ENDS

Forward-looking industry conference focuses on trio of transition themes

Industry’s focus on improving its competitiveness and playing its part in the move towards a new and lower carbon energy mix forms the core of OGUK’s 2019 annual conference on June 4-5, focusing on ‘An Industry in Transition’.

The programme for the event supported by principal sponsor, Total E&P UK Limited, at Aberdeen’s Exhibition and Conference Centre, features a diverse line-up of leading figures from across the sector who’ll consider how, from three different perspectives, energy, people and business, the industry is transitioning.

Deirdre Michie, OGUK’s chief executive, said:

“Finding new ways of working, promoting smarter use of technology and driving efficiency remain critical to the competitiveness of North Sea oil and gas production, supporting our aim of meeting as much of the UK’s energy needs as possible from our domestic resources. This industry is also actively involved in enabling the transition towards a lower carbon energy mix. Our ability to achieve these two goals depends on the skills and experience of our people today and tomorrow and the strategies we have in place to ensure existing and future generations develop the skills that equip us for the future.”

Key industry leaders Ariel Flores, BP; Dave Stewart, Wood and John Pearson from Petrofac will chair three separate business transition sessions. These will focus on efforts to accelerate the transition, better ways to unlock the UK North Sea’s potential together with the industry’s Efficiency Task Force and a session examining the impact of technology in delivering efficiency improvements.

The topics of workforce engagement and culture plus oil and gas skills development will feature in the people transition discussions. These include one led by John McDonald, OPITO plus additional activities aimed at encouraging new talent with transferable skills across different energy sectors.

Colette Cohen from the Oil and Gas Technology Centre (OGTC) will chair discussions on transformational technologies in the energy transition, while Roger Esson, OGTC will focus thoughts on the role of diversification within the sector with input from organisations including Scottish Renewables, represented by Claire Mack.

Vision 2035, the industry’s ambition to add at least another generation of productive life to the UK North Sea and expand supply chain opportunities will feature in the energy transition session which will feature input from John Pearson, Petrofac; Graham Bennett, DNVGL and Bjorn Johansen from Equinor.

More than 500 people attended OGUK’s conference last year – with leading figures from industry, government, the regulators, academic and other trade associations, and this year the event is also supported by Stratasys GmbH and Larsen & Toubro Infotech Ltd.

Places can be booked here.

 

Ends

Industry body to play key role at Houston’s international conference

From left: Matt Abraham, Rebecca Groundwater and Karis Thain

The leading representative body for the UK’s offshore oil and gas industry will next week head to a major international conference to champion the sector. OGUK’s supply chain director, Matt Abraham, will chair a sell-out business breakfast on May 7 during the Offshore Technology Conference in Houston, Texas.

With major global companies making room for newer operators on the UK Continental Shelf (UKCS), Matt will encourage an international panel of experts from companies including Simmons Energy, Wood Mackenzie, Burness Paull, Findlay Anderson, Baker Hughes GE and Baker Botts to consider the changing dynamics and potential opportunities for the supply chain.

Matt Abraham, OGUK’s supply chain director, said:

“We recognise we’re in a new reality, where it’s vital to embrace innovative business models and work co-operatively and the hard-won benefits of adopting this mindset are beginning to show. Sharpening our focus on efficiency improvements is enabling us to gain critical mass across the industry to help unlock new UKCS projects and hone our supply chain’s competitiveness so OTC provides the ideal platform to showcase these world-class capabilities.”

Matt will be joining OGUK’s membership relations manager, Karis Thain and lead external affairs adviser, Rebecca Groundwater in representing member companies and connecting with industry partners and stakeholders to gain deeper insight of the international opportunities available to the UK supply chain.

­“The UK supply chain has developed such competitive capabilities and skills, we believe it has a great opportunity to grow business in international markets and benefit from diversifying into other sectors,” added Mr Abraham.

ENDS

New reality could unlock £200bn of future business opportunities

A sustained focus on cost and efficiencies with ongoing uncertainty in commodity markets marks the “new reality” for the UK’s offshore oil and gas sector, according to a flagship report into industry performance published today (Wednesday 20 March).

Oil & Gas UK’s (OGUK) Business Outlook 2019 finds continued uncertainty in commodity markets is reinforcing investor caution, with forecasts indicating a conservative outlook for prices. Against this backdrop, exploration and production companies remain focused on cost whilst striving for further business and operational improvements.

While the report finds 62 percent of contractor companies have an improved outlook for 2019, many areas of the supply chain are still experiencing challenges as industry emerges from one of its most difficult downturns.

New findings in the report reveal that £200bn will need to be spent by exploration and production companies in existing operations and new opportunities to realise industry’s Vision 2035, and adding a generation of productive life to the basin.

The report shows:

  • Production has increased by 20 percent over the past five years, following 14 years of decline.
  • Companies are looking to maintain unit operating costs at current levels, with operating expenditure running at around £7-7.5bn through 2019
  • Momentum is building around exploration activity, with up to 15 exploration wells expected in 2019, including several potentially high-impact prospects
  • Supply chain revenues are anticipated to stabilise aided by new capital approvals and operational investment, however pressures remain in some areas of the supply chain
  • The largest ten E&P companies accounted for just over half of production in 2018 compared to more than two-thirds in 2008, reflecting an increasingly diverse corporate landscape
  • Production from the UKCS continues to provide around 60 percent of the UK’s oil and gas demand reducing reliance on imports
  • Drilling activity – key to progressing resources to production – remains at a record-low rate
  • Despite the low level of activity, up to 485 million boe have been discovered so far from exploration wells drilled in 2018 – a similar total to discovered volumes in Norway but with 20 fewer wells
  • More new projects were approved in 2018 than the previous three years combined, unlocking over £3.3 billion of new capital investment and more than 400 million boe of new reserves – a similar number are expected in 2019
  • Around £200 billion will need to be spent to add a generation of productive life to the basin, providing significant opportunities for both supply chain and E&P companies.

Commenting, OGUK Chief Executive Deirdre Michie said:

“Our Business Outlook Report 2019 shows that industry’s approach during the downturn is delivering results. Following 14 years of decline, production has increased by a fifth over the past five years.  Cost improvements are being sustained and there is building momentum around exploration, with more new opportunities being drilled and the largest two conventional discoveries for a decade made in the second half of 2018.

“Our report finds an industry that’s getting better at what it does, getting smarter in how it does it and is well positioned to deliver attractive returns on investment within this environment, maintaining our global competitiveness. This is the new reality and we need to embrace it.

“However, challenges remain across parts of the supply chain, with revenues and margins still under pressure and cash flow stretched. If capabilities and resources are to stay anchored here in the UK, there must be a competitive proposition for supply chain companies to invest in too.

“With focus on adding a generation of productive life to the basin, our report reveals around £200 billion will need to be spent to find, develop and operate the reserves of the future.

“In a year in which output from the UK Continental Shelf met around 60 percent of primary UK oil and gas demand, the importance of our hard-fought investment conditions is reinforced – not only for our industry but for the UK economy.

“This is a UK industry which is critical for security of energy supply, at the heart of the move to a lower carbon economy, supports hundreds of thousands of jobs and contributes billions to the economy.

“With the new reality clear and clarity around the future potential, there is all to play for.”

Ends

UK offshore industry welcomes Spring Statement

The leading representative body for the UK’s offshore oil and gas industry has welcomed the Chancellor’s Spring Statement today.

Independent OBR figures published today demonstrate that the industry will contribute £8.5 billion in direct taxes to the Exchequer over the next five years and will continue to provide around half the nation’s oil and gas needs.

The government further launched the call for evidence on strengthening the UK’s offshore oil and gas decommissioning industry.

Speaking in response to the Spring Statement and call for evidence launch, Oil & Gas UK Chief Executive Deirdre Michie said:

“At a time when industry continues to face many uncertainties, fiscal and regulatory stability are key enablers to help the offshore industry realise the opportunities for decades to come in the North Sea.

“The £8.5 billion in direct taxes adds to the £350 billion already contributed over the last five decades. It reinforces the continued importance of our industry to the wider UK economy, supporting over 280,000 jobs, many of them highly skilled, and providing security of energy supply.

“We look forward to continuing our collaborative engagement with HMT and BEIS on the decommissioning call for evidence. The UK is leading the way as a decommissioning centre of excellence through both effective cost leadership and technical expertise. Working closely, we can together create an enduring benefit to both our world-class supply chain and the nation.”

 

 

ENDS

Oil & Gas UK’s response to OGA’s forecast that UK oil and gas production has risen

In response to the “Projections of UK Oil and Gas Production and Expenditure Report” published today by the Oil and Gas Authority, which says oil and gas production in the UK increased by more than 4% in 2018, Oil & Gas UK’s (OGUK) Upstream Policy Director, Mike Tholen said:

 

“This demonstrates that the approaches and strategies of exploration and production companies are paying off and we look forward to shedding more light on this when OGUK publishes our Business Outlook later this month.

 

“This is a significant milestone for an industry emerging from one of the toughest downturns in memory. However, in a competitive global market where the competition for investment is intense, it remains critical to maintain the fiscal and regulatory conditions which have supported this solid production performance delivered by industry.

 

“The UK’s offshore industry has a significant role to play enabling the transition to a lower carbon economy, part of that is ensuring we meet as much as possible of the national demand for oil and gas from domestic resources rather than from imports. Maintaining investment in our industry will be critical to our efforts to realise the full potential of the basin as outlined in Vision 2035.”

 

The report is available here

 

ENDS

 

OGUK manager to champion UK diversity efforts on international stage

Aberdeen,Friday 2nd November 2018
Pictured is ”The Oil Industry’s Best Kep Secret” Event at Spirit Energy, Aberdeen
Picture by Euan Duff / Abermedia

A leading advocate for diversity and inclusion in the offshore oil and gas industry will give a keynote speech on UK efforts at a prestigious international drilling conference later this week.

Katy Heidenreich, Upstream Operations Optimisations Manager at Oil & Gas UK, will address a special diversity and inclusion session at the SPE-IADC Drilling Conference being held at World Forum, the Hague, from 3 to 5 March.

Dubbed as the world’s premier drilling event, the conference attracts international operator companies, contractor firms and service companies to address challenges and deliver improved performance.

Speaking ahead of the conference, Katy Heidenreich said:

“This is an important opportunity to reflect on efforts to improve diversity and inclusion in our industry on an international stage. Since the launch of my book I’ve been overwhelmed by support from the UK’s offshore oil and gas industry as well as wider bodies responsible for promoting skills development.”

Responsible for promoting operational excellence and driving initiatives that align with the Maximising Economic Recovery Strategy, Katy has spent most of her career in the oil and gas industry working in technical and senior management roles in the UK, Norway and Azerbaijan. Katy also recently became a published author, releasing a book supported by OGUK focusing on the impact women have had on the oil and gas sector.

Katy Heidenreich adds:

“We know that meaningful diversity and inclusion has a real impact on companies bottom line, with reports showing gender diverse companies are 15 percent more likely to financially outperform those in the bottom quartile. For ethnically diverse companies this goes up to 35 percent and clearly demonstrates that diversity and inclusion is key in our efforts improve the competitiveness of the UK Continental Shelf.

“I look forward to shining a light on some of the great initiatives being led by UK companies to improve diversity and inclusion, and to learning about what more we can do to drive equality of opportunity.”

Ends

Forties Pipeline System investment is vote of confidence in North Sea future

The leading representative body for the UK’s offshore oil and gas industry has today welcomed news INEOS is to invest £500m in the Forties Pipeline System as a vote of confidence in the future potential of the industry.

INEOS said today that the investment will transform the asset and extend the life of the pipeline by at least twenty years.

Commenting, Oil & Gas UK upstream policy director Mike Tholen said:

“Investment of this scale in the Forties pipeline system is a vote of confidence in the future potential of the UK North Sea. The rejuvenation of this critical infrastructure, embedded at the heart of industry for nearly 40 years, strengthens our aim to add another generation of productive life to the basin outlined in Vision 2035.

“The modernisation programme will provide operators with a greater degree of certainty when making investment decisions about the future development plans for their assets’.

 

ENDS

Global transparency initiative confirms UK oil & gas industry net contributor to UK economy

Oil & Gas UK has today welcomed the publication of the 2017 reconciliation report of the UK Extractive Industries Transparency Initiative (EITI), which confirmed the quality and integrity of the industry’s contribution to the UK economy.  EITI is a voluntary global standard, which promotes open and accountable management of natural resources through the reconciliation and disclosure of the revenues paid/received for a country’s natural resources between companies and the government.

Commenting on the report, Oil & Gas UK Fiscal Policy Manager Romina Mele-Cornish said:

“The 2017 EITI report shows that extractive industries added £22 billion in value to the UK economy, the vast proportion of which was delivered by the activities of the UK’s oil and gas industry. Even during the depth of the downturn, the report found that industry contributed £847 million in direct taxes to the Exchequer, adding to the £350 billion (in today’s money) already contributed over the last five decades.

“The report also highlights the continued importance of our industry to the wider UK economy, supporting over 200,000 jobs, many of them highly skilled, and providing security of energy supply.

“All our member companies in-scope of EITI have actively participated in the 2017 reconciliation.  This reflects industry’s commitment to this voluntary scheme in what is an important year for UK EITI as we progress through the international validation process.”

The report can be found here

Ends

Oil & Gas UK welcomes Glengorm discovery as a major find

Commenting on CNOOC’s announcement regarding a new gas discovery on the Glengorm prospect, Oil & Gas UK’s market intelligence manager, Ross Dornan, said:

“This is a major find and a great example of partner companies, CNOOC International, Total E&P and Edison working together to explore and unlock the potential of the UK Continental Shelf UKCS). Glengorm was a challenging prospect to drill, however the combined determination and perseverance of the partners has paid off. The location of the discovery, in the central North Sea, also provides a valuable opportunity to make use of the UKCS’ extensive infrastructure network.

Coming so soon after the Glendronach discovery in September, Glengorm is a major milestone towards adding another generation of productive life to the UK North Sea and realising the ambition of Vision 2035.”

 

ENDS

Statement on Brexit

Oil & Gas UK Chief Executive Deirdre Michie said:

“A deal outcome is in the best interests of this industry, which is critical for security of energy supply and supports hundreds of thousands of skilled jobs right across the UK.

“We will continue to work with all parties and governments to inform the debate and encourage a constructive and timely approach to securing a deal which achieves the priorities identified by industry and can command the necessary political support.”

Our identified priorities are:

  1. Protecting the offshore industry from future EU regulatory changes.
  2. Minimal friction between the UK and EU.
  3. Maintaining a strong voice in Europe.
  4. Protecting energy trading and the internal energy market.
  5. Protecting our licence to operate.

Launch of National Decommissioning Centre welcomed by Oil & Gas UK

The National Decommissioning Centre (NDC), a global technology R&D hub, was opened today by Lord Duncan, UK Government Minister for Scotland and Paul Wheelhouse MSP, Scottish Energy Minister in Newburgh in Aberdeenshire.

Oil & Gas UK’s chief executive, Deirdre Michie, said:

“The launch of the National Decommissioning Centre makes clear our ambition to become a trail-blazer in decommissioning.

The UK’s oil and gas industry is renowned across the globe thanks to its dynamic supply chain and expert capabilities.

With first mover advantage in the global decommissioning market and clear support from the government, regulators and industry, this exciting new facility will play a key role in driving our ambitions forward.”

More information about the centre is available here 

 

 

 

Oil & Gas UK responds to Wood Mackenzie upstream 2019 report

Report signals fresh investment for the UKCS in 2019

 

Commenting on the WoodMac report released today (Tuesday, January 8), which highlights five themes for the industry in 2019, including North Sea exploration and project investment, Mike Tholen, Oil & Gas UK’s Upstream Policy Director, said:

 

“This report builds on our analysis showing the positive future ahead if we continue to strive towards Vision 2035. OGUK will add more detail on the many exciting future opportunities for our industry in our flagship Business Outlook Report to be published in March this year.

 

“We have already seen the sector delivering improved performance, securing more project approvals in 2018 than in the last three years combined. Our challenge is to build on our successes to generate increased exploration activity.

 

“This is why we remain unwavering in our commitment to Vision 2035 which aims to add a generation of productive life to the basin and expand the supply chain’s global footprint.”

ENDS

Industry demonstrates cost leadership in developing first offshore decommissioning standard contract

 

Oil & Gas UK’s subsidiary LOGIC (Leading Oil & Gas Industry Competitiveness), publishes a new standard contract today (18 December) aimed at helping companies committed to delivering offshore decommissioning excellence. The standardisation of legal contracts, spearheaded by LOGIC in partnership with industry, improves the efficiency of drafting, executing and negotiating commercial agreements.

The not-for-profit organisation, which next year marks its 20th anniversary, continues to play a key role in helping companies improve competitiveness by simplifying transactional processes in the offshore oil and gas industry. More than 24,000 downloads of LOGIC’s suite of Standard Contracts have been recorded globally since April 2014.

Commenting, Graham Elgie, Managing Director of LOGIC said:

“This model contract developed by Oil & Gas UK’s Legal Issues Forum provides companies and their contractors with a framework for working towards commercial agreements in a timely, co-operative and effective manner. This couldn’t have been achieved without the support and expertise provided by industry, particularly the members on our Decommissioning Task Finish Group.

“Parties using this new model contract can reduce bidding costs, eliminate duplication of effort and streamline business processes enabling the UK to build on our growing reputation for effective cost leadership in decommissioning.”

The general conditions of contract for offshore decommissioning covers complete decommissioning of infrastructure, from cessation of production to delivery of structures to shore. It is available from the LOGIC website

In addition to the General Conditions of Contract for Offshore Decommissioning, LOGIC’s other Standard Contracts comprise:

  1. Construction Edition 2
  2. Design Edition 2
  3. Marine Construction Edition 2
  4. Mobile Drilling Rigs Edition 1
  5. Purchase of Goods Edition 3
  6. Services (On- and Offshore) Edition 3
  7. SME Services Edition 1
  8. Subcontract for SME Services Edition 1
  9. Supply of Major Items of Plant and Equipment Edition 3
  10. Well Services Edition 2

ENDS