PESGB February 2015
- Investment and nerve needed to weather the storm, Hamish Wilson, PESGB President 2015
- 2014: New Zealand Acreage Release
- UK E&P Industry
Plus Much More Inside
Investment and nerve needed to weather the storm…
Hamish Wilson, the new PESGB President calls for transformation through greater financial backing and longer term thinking by both industry and government.
As we move into 2015 so the gloom deepens on both the North Sea and the global oil and gas industry in the light of further falls in oil and gas prices. Words like ‘close to collapse’ are being used to describe the state of our industry.
I’m sure the truth is way short of this. Through most of the decade 2000 to 2010 (until the final two years) we were quite used to $40 per barrel and had appropriate cost structures. What has changed in the interim? The regulatory environment has tightened resulting in more costs. However a large chunk of the cost increase is driven by service sector capacity issues. These should realign as the market pressure reduces.
Within the PESGB we have to respond to the changing industry climate and the needs of our membership. Employment is going to become a big issue in the coming months. As in previous down turns, we will be running events targeted at helping members find work. This help will include interview and CV training, significantly reduced prices for our courses for unemployed people, and advice on setting up as a consultant. If you are interested in these activities please can you contact the PESGB office.
21st Century Exploration Road Map (XRM) is gathering momentum and support in its efforts to improve geological understanding to increase well success rates. There are three activities that I’d like to bring to your attention.
1) The Pitfalls conference is in early February. This will be an opportunity to share experiences from our successes and failures. A key presentation at this conference will be on the Central North Sea and Moray Firth Well Failure Analysis. This is a critical project and will help shape the future XRM work programme
2) The industry is being canvassed to see if there is interest in group funding of seismic surveys in frontier basins. Please get your ideas into Oil and Gas UK.
3) The first geoscience project of the XRM has been started on the Palaeozoic being led by the BGS. This is a very exciting development for the North Sea and I urge members to get involved and support this initiative.
Whilst on the subject of the North Sea, I recently watched Andrew Marr’s TV series on a History of Modern Britain. He commented that the contribution of North Sea Oil had been ‘airbrushed out’ of Britain’s economic history. A very powerful comment which resonates today – the industry still suffers from government neglect. A key area of government neglect is in geosciences. The North Sea continues to be a major contributor to government revenues, yet funding for geoscience research and the BGS has been slashed.
So it’s great to see funding going into the Centre for Doctoral Training in Petroleum Geology and to support the BGS for the Palaeozoic study. But the amounts being spent are tiny – Petroleum Geology receives 1% of the NERC funding for Earth Sciences. The funds being put towards the BGS for the Palaeozoic are similarly inconsequential if the BGS is to develop and host a world class understanding of the North Sea. I find it staggering that we don’t have a collective understanding of the yet to find reserves (YTF) of the North Sea. How can the country manage our resource base, when we don’t know how much is there?!
Yet, to offset the decline in the BGS, in the UK we are home to the world’s leading geoscience consultancy companies. No other country has such a concentration of talent in the service sector; a consequence of top quality universities and our own North Sea incubator. We must find a way to bring this talent to bear on solving the North Sea’s geological challenges.
Our challenge as an industry is to win government attention and to make sure we attract the necessary funding and leadership to transform the North Sea.