Stuart Dickson Posted June 17, 2015 Report Share Posted June 17, 2015 The newly appointed chief executive of trade body Oil & Gas UK has warned the UK sector must become sustainable “in a world of $60 oil”. Deirdre Michie made the remarks at the Oil & Gas UK annual conference which is currently taking place in Aberdeen. Michie told the audience of around 500 delegates the oil and gas sector has “built an industrial powerhouse for the UK” over the past 50 years, but the industry is now facing “real and present threats” which are “challenging” its future. She said: At $60 oil, 10 per cent of our production is struggling to make money and there is a shortage of capital and a shortage of investors willing to place their money here. “While demand for our products remains strong, critical for our transport and heating our homes and giving us a whole host of everyday products, our productivity as an industry has fallen - and fallen rapidly. “In relation to our escalating cost base, we know that as an industry we have been part of the problem; now we need to be part of the solution. “Over the last 20 years, the price has averaged at $62 per barrel and the forward curve is between $65 and $75. “Therefore it is not unreasonable for the North Sea to set out its stall at being sustainable in a $60 world. “As a target, it's one that we as a trade association can champion, Government can align with and the regulator can pursue as an enabler, for example, to focus on key infrastructure.” First Minister Nicola Sturgeon, who opened the conference on Wednesday, said North Sea exploration needed “urgent support.” Speaking ahead of the conference, Ms Sturgeon said: “The Scottish government believes it is important that we have stronger fiscal incentives to support exploration. “This could include the implementation of a new exploration tax credit, or expanding the scope of the investment allowance. “The critical issue is that the UK government needs to deliver on its commitment to consult on incentives to boost exploration in the North Sea, and this consultation must be launched urgently - so that firm proposals can be announced in the Autumn Statement.” A report launched today by accountants PwC outlines steps it believes are necessary to secure the long-term future of UK continental shelf. Central to this is a suggestion cost reductions of up to 40 per cent a barrel must be achieved to secure a sustainable future for the basin. PwC said the recent drop in oil price from $110 to a low of $45 a barrel, before rallying at $60, has “brutally exposed a substantial escalation in cost base across UK oil and gas operations”. Gordon Colborn, consulting leader at PwC in Scotland, said: “Personally, I believe this industry can have a sustainable future but we need to take a more strategic and integrated view if we are to extend the life of the North Sea for everyone involved and for future generations. “It’s time to act.” Thank f**k for the 55% - the real Scottish heroes. Quote Link to comment Share on other sites More sharing options...
DougJamie Posted June 17, 2015 Report Share Posted June 17, 2015 Agreed Stu, so who do you think will be Murrays first proper signing then? Quote Link to comment Share on other sites More sharing options...
Isle Of Bute Saint Posted June 17, 2015 Report Share Posted June 17, 2015 (edited) Brent oil will reach a high of $80.00 a barrow by the years end that's the figure coming out of Houston by many experts. So saying $60.00 a barrow is a good figure to work on. Facts are opec particular the Arabian countries are over producing saturating the market with oil in the hope that it closes more flacking producers in America. America is almost self sufficient in oil where it was not before. Bush when in power said at the time America must not be held to ransom by the middle east for oil. True to his word they are self sufficient. Many countries out there like where I am Brazil are hardly making a profit because it is so expensive to extract oil in deep water. Nigeria , Angola are hurting big time also. For consumers its good news. For industry workers its a disaster , not right now the next two years is when the pain will really be felt as producers cut down on maintenance and exploration. As an example my employer is shedding jobs. Two weeks ago it was 2,500 jobs to go. On Monday a new e-mail came out putting the figure up to 3,500. That's just one company. The service industry of which Scotland employ thousands will be hit hard over the next two years when work dries up. Really feel for young men and woman who have families and mortgages. I'm at an age where I would be happy with a redundant package having served years off shore. Stuart this thread is not about people losing jobs or the good for consumers. Its about a political dig for you in particular the effects of SNP spending. Your sad seriously. Edited June 17, 2015 by Isle Of Bute Saint Quote Link to comment Share on other sites More sharing options...
delpierro Posted June 17, 2015 Report Share Posted June 17, 2015 someone gee the gramophone a bump; the needle's stuck!! Quote Link to comment Share on other sites More sharing options...
Guest TPAFKATS Posted June 17, 2015 Report Share Posted June 17, 2015 Less is more Dicko, less is more Quote Link to comment Share on other sites More sharing options...
faraway saint Posted June 17, 2015 Report Share Posted June 17, 2015 Zzzzzzzzzzzzzzzzzzzzz Quote Link to comment Share on other sites More sharing options...
DougJamie Posted June 18, 2015 Report Share Posted June 18, 2015 Anyway back to a football team in Paisley that I support. Callum Ball was a barrel is that relevant to this thread ?? Quote Link to comment Share on other sites More sharing options...
insaintee Posted June 18, 2015 Report Share Posted June 18, 2015 I always trust everything the chief executive of big oil says. Always Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.