The UK’s offshore oil and gas industry appears to be caught in a perfect storm. The sustained drop in the oil price coupled with the high costs of operating in the mature UK Continental Shelf (UKCS) have left the industry globally uncompetitive and knocked investor confidence. Yet while the outlook might seem bleak, there is still opportunity to transform the UKCS once again into a highly competitive, high activity basin attractive to a variety of operators and supporting a global supply chain. With up to an estimated 20 billion barrels of oil and gas still to recover, the prize could be great indeed.
Deirdre Michie, Chief Executive of Oil & Gas UK, visited us to talk about the industry’s response to the current challenges, pointing to improvements in the industry’s cost base following 18 months of concerted action to cut costs and drive efficiencies throughout operations across the supply chain. However, these efforts alone will not secure an enduring future for the industry. Ms Michie highlighted the role both the regulator – the new Oil and Gas Authority – and the UK and Scottish governments must play to support the industry and help it emerge from the downturn in a robust good form. She also challenged the financial community on the hand it can lend to help the sector build the bridge to a brighter future.
You can listen to the podcast here.