Jobs purge not over yet

THE great oil and gas job purge is set to continue well into 2016 despite the North Sea showing welcome signs of recovery with 2015 production recording its biggest production rise in over 15 years, the UK's peak industry body has warned.
Jobs purge not over yet Jobs purge not over yet Jobs purge not over yet Jobs purge not over yet Jobs purge not over yet

Oil & Gas UK CEO Deirdre Michie confirmed this week that government data for the first 10 months if last year showed that the total volume of oil and gas produced on the UK Continental Shelf was up 8.6% compared with 2014, with the production of liquids up 10.6% and gas up 6.1%.

"Output in November and December tends historically to be more stable, but even so, Oil & Gas UK now expects year end production for the full year of 2015 to be 7 to 8% higher than last year," Michie said.

OGUK predicted in February last year that there would be only a marginal increase in production for 2015.

However, Michie was happy that the industry-wide focus on improving production efficiency coupled with investments of more than £50 billion ($A102.08 billion) over the last four years to bring new fields on stream across the last 12 months was paying off and yielding a better result.

"The upturn underlines the industry's commitment to the UKCS - which still holds great promise for the future and is vital for the country's security of supply," she said, citing Taqa's announcement last week of first production from the Cladhan field north-east of Shetland, which is estimated to produce 10,000 barrels of oil a day from the UK's waters.

However, the pain isn't over yet.

Michie said that while the UK offshore oil and gas industry, like everywhere else, has had to adapt to the low oil price and driving greater efficiencies throughout its operations, the inescapable truth is that the value of its product has more than halved.

"Times are really tough for this industry and for the people working in it," Michie said.

"We will continue to see job losses as we move into 2016 and we must be thoughtful and supportive of our colleagues and their families who are being made redundant or who are at risk of being made redundant.

"As we go through these times, we have to be resilient and focus on what we need to do to get us through the coming months to ensure an enduring industry for the future.

"Even in these challenging times, we continue to have a supply chain that is the envy of the rest of the world as a centre of excellence for offshore technologies.

"The supply chain generates tens of billions of pounds in domestic and export sales. It has a workforce with expertise that is unsurpassed globally, and whose skills will be critical in helping us unlock the remaining barrels on the UKCS.

However, with up to 20 billion barrels of oil and gas estimated still to recover, she believes there is still plenty of opportunity ahead. The question will be how the industry can commercialise it in an oil glut that is expected to continue until the fourth quarter of this year.

OGUK's industry-led Efficiency Task Force will lead the drive for greater co-operation across the sector, and recently launched The Industry Behaviours Charter as a catalyst for change and the online portal Rapid Efficiency Exchange, where companies can share common problems and highlight successful solutions.