A report from Deloitte, the business advisory firm, has suggested that massive change is needed if the oil potential held in the North Sea is to be maximised.
The report urged the Oil and Gas Authority (OGA), the Government and companies operating in the North Sea to reconsider their ‘game plan’ when dealing with the North Sea oil as it still holds great potential which is currently not being exploited due to 40 year old practices.
Several suggestions were made on how to improve the current operations at the UK Continental Shelf (UKCS); at the forefront of these was the need for a strong new regulator which could influence and oversee all activity in the Sea. Additionally they argued that the government needs to implement a ‘stable, simple and internationally competitive fiscal regime which reflects the diverse profile of the UKCS’, and they also suggested that closer collaboration between companies could lower costs and improve efficiency through benefits such as shared infrastructure.
Derek Henderson, senior partner in Deloitte’s Aberdeen office, summarised their suggestions as the following; “The UK’s oil and gas industry is going through a serious period of transition; its three major stakeholder groups need to change significantly and adapt quickly. There must be more collaboration both between and within the groups.”
Henderson commented: “Only about a third of the known recoverable resources in the UKCS are left. The ‘easy oil’ days are gone and we need a fiscal regime that is more reflective of the current state of the basin. Companies are looking for a tax system which is simple to navigate, stable over the longer-term, incentivises investment and is competitive by international standards. Making the right changes could mean billions of pounds of difference to the UKCS, and simultaneously increase the taxable income as more oil and gas is recovered.”
The North Sea has been exploited for over 40 years, so it comes as no surprise that there is much less oil than there once was. However, the North Sea still holds massive potential for oil and if OGA, the government and operating companies take note of this advice they will be much better served.
At Blueprint we believe that the North Sea has a long life ahead of it yet, and believe it will stand as a strong provider of energy and jobs for many decades to come.
If you would like a job working within the oil & gas sector, give us a call on 02392 603030 to see what vacancies are available.
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