Oil & Gas UK announced Tuesday the launch of a UK-wide campaign, called "Energising the Nation's Future", designed to improve awareness and understanding of the oil and gas industry and better map its contribution to the UK.
The campaign follows the UK government's publication in March of its Oil and Gas Industrial Strategy, which outlined the government's plans to secure investment and create jobs.
Through a series of events and activities over the next few months, Oil & Gas UK plans to demonstrate the central role played by the oil and gas sector through innovation, jobs creation and its economic contribution – both direct and indirect.
The first step in the campaign is to build a new picture of the industry's UK-wide network of skilled workers and celebrate the breadth of the supply chain supported by the sector, the organization said.
Oil & Gas UK Chief Executive Malcolm Webb commented in a statement:
"The oil and gas sector is the single largest industrial contributor to the UK economy. However, as an industry, we have perhaps not consistently engaged and explained the role that we play. The UK Government's recent Oil and Gas Industrial Strategy brought deserved recognition to our industry and the capabilities of our world-class supply chain. Nevertheless, the sector is still laboring under several misconceptions about our reach and relevance and we need to improve awareness and recognition of the important value we add to people’s lives."
UK Secretary of State for Business Vince Cable added:
"This campaign is just the start. Over the coming months we will raise awareness of the industry and illustrate its importance to the UK economy as part of our oil and gas industrial sector strategy.
"The sector generates almost [41.9 billion] £27 billion in revenue alone and its extensive supply chain will be a strategic resource for the UK for many decades to come. This is an expanding industry and by working together we will be able to help create more jobs, attract the best talent and celebrate the breadth of the sector."
The winners of the 2013 UK Oil and Gas Industry Safety Awards, sponsored by Maersk Oil UK, were announced at a special lunchtime awards ceremony in Aberdeen on April 24. The showcase event, held at the Aberdeen Exhibition and Conference Centre, saw over 500 people attend, including workforce representatives, safety professionals and oil and gas industry leaders.
Jointly organised by Oil & Gas UK and Step Change in Safety, the awards were established in 2010 to celebrate the outstanding people and companies helping to create safer offshore working environments – whether through innovative new processes or exceptional individual enthusiasm and personal commitment.
The winners are:The Brent Delta Decommissioning Team
won the first ever Award for Workforce Engagement, sponsored by Fairfield Energy Limited. The award recognises a team that has actively embraced worker engagement on safety matters. Petrofac’s Control of Work Team
won the Ideas in Safety Prize and picked up a cheque for £5,000. The prize recognises the resourcefulness and creativity of individuals or teams working offshore who have an idea to reduce hydrocarbon releases. Kent Lanier, rig manager, Rowan Drilling UK,
won the Award for Safety Leadership, sponsored by Chevron North Sea Limited, which recognises an inspirational leader who motivates and engages their team to work safely. Marc Brankin, scaffold chargehand on the Brent Decommissioning Project
is the winner of the Award for Most Promising Individual, sponsored by Draeger Safety UK Limited, which recognises an up-and-coming person with potential, who has shown great enthusiasm for offshore safety, actively embracing safety culture. Scott MacDonald, offshore electrician with Archer
, won the Award for Preventative Safety Action, sponsored by ABB Consulting, which recognises a sharp, quick-thinking individual who has challenged a situation and successfully intervened to prevent a potential incident. CHC’s Captain Tony Bull also received a special commendation in this category. Nicky Elphinstone, a steward with Aramark
, scooped the Award for Safety Representative of the Year, sponsored by BG International Limited, which recognises an enthusiastic and committed safety representative who is driving the safety agenda at their worksite. Stork Technical Services and bSolutions @ Banff and Buchan College
won the Award for Innovation in Safety (Company Award), sponsored by Talisman Sinopec Energy UK Limited, which recognises a company which has put in place a clever process or technique to improve safety either across an organisation or at an individual worksite.
The winners were presented with their prizes by the event’s keynote speaker Grahame Smith, general secretary of the Scottish Trades Union Congress (STUC).
Oil & Gas UK’s health and safety director Robert Paterson said: “The UK Oil and Gas Industry Safety Awards has once again brought to the fore an inspirational group of people and organisations. The winners, and indeed everyone nominated, are actively doing great work to keep the safety of our people at the forefront of our industry.
“The importance of celebrating these great achievers cannot be understated. This year the safety awards have been the biggest and best yet with a record number of entries and a record number of people attending the ceremony itself.
Step Change in Safety team leader Les Linklater said: “The safety awards are growing every year and this year we expanded the awards to include a new category which recognises effective workforce engagement, while we continue to tap into the workforce’s creativity with the Ideas in Safety Prize.
“I’d like to congratulate all the nominees who should be rightly proud to be among the very best of this industry’s top safety performers and I hope their ideas, enthusiasm and achievements will be widely shared and celebrated throughout the UK oil and gas industry.”
For more information, visit http://www.oilandgasuk.co.uk/safetyawards
The U.K. has approved Statoil ASA's field development plan for the $7 billion Mariner heavy oil field, in the North Sea, the U.K.'s largest offshore development in more than a decade, Helge Lund, chief executive of the Norwegian company said Friday.
"We expect to produce about 250 million barrels of oil," said Mr. Lund. "It's a significant investment for us."
The U.K. is a major partner for Statoil, which is in the planning phase for its next U.K. heavy oil field, Bressay, and expects to make an investment decision on that later this year.
"This is a very big project, but there's more to come," said U.K. Energy Secretary Edward Davey in an announcement at the Oslo Energy Forum at Holmenkollen, overlooking the Norwegian capital. "This is a huge and challenging project."
Statoil expects to invest $7 billion in the Mariner field and use pioneering technology to extract the oil, which is much heavier than traditional North Sea oil. Statoil already has experience with heavy oil fields, Mr. Lund said.
"We have done Grane in Norway, which is a heavy oil field, we have done Peregrino very successfully for the last two years in Brazil, so this is a natural extension for us in building a real strong foothold within heavy [oil]," he said.
The Mariner field was discovered in 1982, but production was delayed due to technical challenges in extracting the viscous and dense oil.
"For the technology to exploit it, we've had to wait 30 years, said Mr. Davey. "We've had to wait for Statoil to innovate in the way that you've done, world-leading innovation from Statoil to enable us to exploit these resources. So it's a real tribute to Statoil," said Mr. Davey as he signed the approval letter.
"We have done these projects before, so we are confident on the technology and the execution part as well," said Mr. Lund. "But it is a complex project and a big project, so it requires the best of our teams to make it a success."
It is estimated that the field will produce for 30 years from 2017. Production will reach an output plateau of around 55,000 barrels a day in the 2017-20 period.
Statoil is the operator for Mariner with a 65.11% stake. The field is co-owned by Cairn Energy PLC subsidiary Alba Resources Ltd. with a 6% stake, and JX Nippon Exploration and Production (U.K.) Ltd. with a 28.89% stake.
EnQuest PLC, the largest independent UK oil producer in the North Sea, has secured a brownfield tax allowance to fully exploit its Thistle oilfield.
The next phase in the life extension programme for Thistle, made possible by today’s announcement, will safeguard almost 500 existing North Sea jobs and create almost 1,000 new jobs across the UK oil and gas supply chain in Aberdeen, Newcastle, Manchester and Swansea over the next three years.
EnQuest is among the first oil and gas operators to secure a brownfield tax allowance which is one of a series of measures the Government has put in place to stimulate investment in the North Sea.
Commenting on the announcement, the Economic Secretary to the Treasury, Sajid Javid MP, said: “This is positive news and demonstrates how Government’s package of changes to the oil and gas tax regime, including the introduction of Brownfield allowances, is stimulating billions of pounds of investment, supporting jobs, delivering revenue for taxpayers and helping ensure we make the most of this valuable national asset.”
David Heslop, general manager for EnQuest in Aberdeen, added: “Before EnQuest acquired Thistle in 2010, production was declining and, coupled with ageing infrastructure, it was approaching the point where production may have stopped. As a result of our investment so far, which has included facilities and safety systems upgrades, a major rig reactivation programme and drilling of five new wells, production has significantly increased. With the assistance of the brownfield tax allowance, we are now able to embark on the next phase of Thistle’s late life extension programme, realising reserves of 35 MMboe and extending field life.
“Thistle is a prime example of how we are able to recover more oil from mature assets through a combination of innovative ways of working and technical expertise. It demonstrates what EnQuest does best and underlines our long-term commitment to the North Sea.”
The late life extension programme will see further investment of around £169 million GBP, with contracts for the work being awarded to around 30 companies across the UK supply chain.
The rejuvenated Thistle field has boosted production to levels not seen since the nineties. Following a successful rig reactivation project, completed with an exemplary safety record free of any lost time incidents (LTIs) on drilling operations, EnQuest is now implementing a technology-led work programme which will simplify and streamline processes to create a reliable production environment and include a major power upgrade featuring the installation of a 30MW power generation turbine, a new process control safety system, and wide-ranging topsides integrity work.
Chief executive officer of EnQuest PLC, Amjad Bseisu, said: “In 2012, we welcomed the brownfield announcement from the Treasury in support of investment in mature oilfields. This sent out positive signals about the UK oil industry’s fiscal regime and was particularly positive for EnQuest in terms of executing our long-term strategy of delivering sustainable growth in North Sea oil production. HM Treasury’s approval of our allowance enables us to commit to a new phase of investment, extending the life of the mature Thistle field and gives us the confidence to pursue similar life extension programmes on other assets such as our Heather field. This in turn helps sustain investment in the northern North Sea, safe-guarding and creating jobs, and also sends out a strong message about the long-term future of the oil and gas industry.”
Mike Tholen, Oil & Gas UK's economics and commercial director, said: "Oil & Gas UK is pleased that the tax change made recently by the Government to promote further new investment in the UK's existing oil and gas fields continues to deliver real benefits to the national economy. EnQuest's decision to make fresh investment in the Thistle field will provide hundreds of jobs right across Britain and with extra oil being extracted, UK energy security will be strengthened. Given that oil and gas will still be needed to provide 70 per cent of our energy needs into the 2040s, this announcement reinforces the importance of continued constructive engagement between the industry and Treasury to ensure that the recovery of the UK’s oil and gas resources is maximised in the coming decades."
LONDON—A resumption in North Sea oil output may help the U.K. avoid its third recession in five years after a prolonged shutdown helped tip the country into a fourth-quarter contraction.
A recession is typically defined in the U.K. as two consecutive quarters of falling output. A preliminary estimate published Friday showed the economy shrank 0.3% in the final three months of 2012, putting the U.K. at risk of a "triple-dip" following earlier slumps that began in 2008 and again in 2010.
News of the U.K.'s poor performance pushed sterling lower. The pound, which so far this year has shed more than 3% of its value against the dollar, had fallen as low as $1.5705 early Monday, the weakest since Aug. 21. It also tumbled against the euro.
The Office for National Statistics said a big reason for the fall in output was the closure between late September and early November of the Buzzard oil field, the North Sea's largest. The field, which was shut for maintenance, produces up to 220,000 barrels of oil a day and is operated by Canadian company Nexen Inc. NXY.T +0.04%
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Chinese state energy giant CNOOC Ltd. 0883.HK -2.32% has agreed to buy Nexen.
ONS data showed the Buzzard shutdown led to a 10.2% collapse in output from the extraction industries in the fourth quarter compared with the third. That is the biggest quarterly fall for that category since records began in 1997. The slump lopped 0.2 percentage points off fourth-quarter gross domestic product, the ONS said, meaning the economy would have shrunk only 0.1% if the oil and gas sector was excluded.
Production at Buzzard has resumed, according to oil traders. It means that, as long as there aren't any other severe disruptions in the North Sea, oil and gas output should recover in the first three months of 2013, potentially boosting economic activity overall.
Moreover, traders say a second field, a natural gas and oil field called Elgin, may also come back online toward the end of the first quarter following a lengthy shutdown.
Alan Clarke, an economist at Scotiabank, said he estimates revived North Sea production means oil and gas output is likely to rise about 19% in the first quarter compared with the last three months of 2012.
Assuming other parts of the economy perform as expected, Mr. Clarke has penciled in total U.K. economic growth of 0.25% for the current quarter, meaning the U.K. may narrowly avoid recession.
Any recovery in oil and gas output could be more than offset by weakness elsewhere, making a return to growth far from assured. Mr. Clarke said his forecast is particularly sensitive to activity in the U.K.'s dominant services sector. A cold January left much of the U.K. blanketed in snow, which may also crimp growth.
KUALA LUMPUR: Having made several discoveries at fields offshore Peninsular Malaysia and Sabah this year, Lundin Petroleum AB remains bullish on Malaysia's oil and gas sector.
"We remain very optimistic about the Malaysian oil and gas industry and plan to continue to evaluate new opportunities and grow wherever possible," Lundin Petroleum head of corporate communications Maria Hamilton told Business Times.
On Lundin Petroleum's capital expenditure in Malaysia for this year, Hamilton said:
"We plan to immediately commence our activities and will only make a decision on drilling and capital investment once we have sufficient time to fully evaluate the new data."
North Sea-focused Ithaca Energy has issued a cautious guidance statement for 2013 after producing a robust performance in the final quarter of last year.
The oil and gas junior's production figure of 6,631 barrels of oil equivalent per day (boepd) for 4Q 2012 was in line with forecasts, according to analysts at Cenkos Securities and RBC Europe, in spite of the firm suffering lengthy production outages at its Anglia
Ithaca said that production during 4Q 2012 benefited from a strong performance from the Athena
field, where it is operator. Athena continues to produce "dry" oil at a stable gross daily rate of between 10,000 and 11,000 boepd – with between 2,250 and 2,475 of this going to Ithaca.
For 2013, Ithaca expects export production to be similar to that for the final quarter of 2012 at between 6,000 and 6,700 boepd. Approximately 80-percent of the firm's total net production is anticipated to be derived from the firm's Cook, Athena and Beatrice/Jacky fields.
Ithaca added that this production guidance reflects anticipated water breakthrough at the Athena field during 2013 as well as the impact of planned maintenance shutdowns.
Meanwhile, Ithaca expects to spend a total of $360 million in 2013, with almost all of this being focused on the company's execution of the Greater Stella Area
development that is scheduled for the latter part of the current quarter.
Analysts at RBC Europe pointed out that investment in the Greater Stella Area project is "set to deliver dramatic production growth through 2014-15".
The oil and gas sector delivers more for the Scottish economy than any other sector and a 1% increase in recovery in the North Sea would add £22 billion of extra tax revenue.
Scotland’s Energy Minister Fergus Ewing is expected to explain the importance of the industry’s success and the “huge benefits” of maximising oil and gas recovery in a debate at the Scottish Parliament today.
Mr Ewing will tell the Scottish Government that average rates of recovery are relatively low, with around 40% of resources recovered from oil and gas fields in the North Sea, compared to 48% in the Norwegian territory. It is believed there are 24 million barrels of oil still to be recovered in the North Sea, with a wholesale value of £1.5 trillion.
According to statistics from the Scottish Government, the industry supports 196,000 jobs in Scotland and tax revenue from the North Sea is forecast to raise £34 billion over the next six years. Capital investment in the industry has risen from £8.5 billion in 2011 to a predicted £11.5 billion last year.
Mr Ewing said: “No sector delivers more for our economy than oil and gas,and maximising the percentage of the oil and gas recovered should be a priority for everyone involved in the industry… Maximising recovery is at the heart of this Government’s plan for the sector – a plan outlined in the strategy we developed with the sector – and the benefits are not just financial.
“I firmly believe that oil and gas is too precious an asset to fritter away. If we are able to increase the percentage we recover, then not only will we deliver huge economic benefits – we will also prolong the length of time this valuable asset is available. Maximising recovery is about prudent stewardship of limited resources. When oil and gas was first discovered off the North Sea we were told it would last a decade – four decades on, I am determined to hand on this precious legacy to generations to come.”
Oil and gas currently meets more than two thirds of the UK’s energy needs and supports around 440,000 jobs across the country.
The government has given the go-ahead for a firm to resume the controversial technique known as fracking to exploit gas in Lancashire.
The company, Cuadrilla, was stopped from fracking after two tremors near Blackpool.
Conditions have been imposed to minimise the risk of seismic activity.
In fracking, a mixture of water, sand and some chemicals is pumped into a well under high pressure to force the gas from the rock.
The Energy Secretary Ed Davey said shale gas was a promising new potential energy resource for the UK. It might contribute significantly to energy security and substitute for imports which are increasing as North Sea gas is decreasing.
But he warned against over-excitement: "We are still in the very early stages of shale gas exploration in the UK and it is likely to develop slowly.
"It is essential that its development should not come at the expense of local communities or the environment. Fracking must be safe and the public must be confident that it is safe."
He said the government had uncovered management weaknesses in Cuadrilla following the minor earthquakes. These had been put right, he said.
He said impacts on water and local air pollution were already covered by the UK's existing "stringent" rules on oil and gas.
'Better solution'Mr Davey said the advent of shale gas would not weaken the UK's legally binding targets to cut greenhouse gas emissions. He announced a study from the Department for Energy and Climate Change (DECC) chief scientist David McKay on the impact of shale gas on climate change.
But he asked: "Is it not better that we produce gas in this country than gas shipped half way across the world?" He said his view was that, overall, greenhouse gases from shale gas in the UK might only be slightly greater than importing gas exploited in the conventional way.
In the US, exploitation of shale gas boom has sent energy prices tumbling, and the Prime Minister has expressed hopes that the UK can enjoy a similar boom.
But government advisers warn today that shale gas may be unlikely to bring down energy prices much in Britain.
In fact, the Committee on Climate Change warns that relying heavily on gas for future electricity supplies would leave households vulnerable to higher bills in the long run as the price of gas on the international market is volatile.
The UK won't benefit from substantially lower prices unless the rest of Europe decides to back shale gas too, as Europe has a gas grid that allows gas to be traded to the highest bidder.
The CCC has examined the potential impact on bills of different energy systems and predicts that subsidies to renewables and nuclear would put about £100 on household bills by 2020, but that by 2050 a gas-based electricity system might cost people as much as £600 extra.
Today's fracking decision has created political excitement as the Prime Minister the Chancellor and some business leaders have spoken enthusiastically about shale gas.
Environmentalists are more cautious following incidents in the US in which fracking has been associated with pollution of water through the chemicals involved in the process, as well as leakage of methane - a powerful greenhouse gas as well as a local air pollutant.
They say fracking will generate much more opposition in the UK than it has in the US as it involves turning green fields into industrial sites.
They also worry that an abundance of domestic gas will tempt politicians to abandon targets for cutting greenhouse gases, which are rising inexorably globally to the alarm of scientists.
A poll suggested that people would prefer to have wind turbines on the horizon than gas rigs.
Steve Radley, Director of Policy at EEF, the manufacturers' organisation, said the UK should do whatever possible to keep energy costs down: "This is a major threat that needs to be addressed now as we cannot continue to load industry with costs which are in excess of our competitors.," he said.
Caroline Flint MP, Labour's Shadow Energy Secretary, said: "Labour has always said that fracking should only go ahead if it is shown to be safe and environmentally sound. If the Government believes that this is the case then we will look carefully at their proposals.
"But the idea that this form of gas extraction can have the same impact here in the UK as it has had on gas prices in the United States is considered wishful thinking by most experts."
Europa Oil and Gas is to step up exploratory drilling with at least at least one new UK well planned for the current year.
A commitment well on either the Wressle prospect or Broughton oil discovery will be drilled in the second quarter, each of which the company rates as having a one in three chance of materially adding to its net production and reserves.
Production at Europa’s three onshore fields increased 18% and generated revenues of £5.1 million in the year to July 2012, a 34% increase on the previous twelve months.
The group had its plans to drill an exploratory borehole at Holmwood prospect on the PEDL143 licence in the Weald Basin, Surrey rejected by the local council, but said it looked forward to taking its appeal to the High Court.
In France, Europa said it will also look to drill one of the shallow gas prospects identified earlier this year on the onshore Béarn des Gaves permit area.
One of these, a shallow prospect at Berenx, may hold mean contingent resources of 59 bcf of gas and, at an estimated cost of between €4-5 million to drill, offers a route to unlock the significant potential of the permit, Europa said.
The company added it understands that the French authorities have made a recommendation with respect to renewing the Béarn des Gaves permit and its awaits ratification by the minister.
Elsewhere, Europa shares soared earlier this year on the identification of two large prospects, Mullen and Kiernan, on its permits off the coast of Ireland in the Atlantic (IAM).
Technical evaluation of the existing data continues it said and Europa will provide the market with estimated volumetrics for the large Kiernan structure in due course, it said today.
Exxonmobil is scheduled to drill the Dunquin well, which sits adjacent to Europa’s IAM prospects, in the first half of 2013 and Europa will be following developments there "closely".
“We are encouraged by the progress made over the course of the last twelve months and are looking forward to the year ahead, which will not only see further progress made in advancing our balanced portfolio of assets along the development curve, but will also include drilling at least one well in the UK,” the statement concluded.