The Courier & Advertiser (Fife Edition)
Oil firms ‘must keep eye on the ball’
The chief executive of Oil & Gas UK (OGUK) Deirdre Michie yesterday challenged companies to prove cynics wrong by showing they have learned the lessons of the downturn.
The head of the industry body said “bold steps” have been taken over the past two years to increase efficiency and lower project costs.
But there are concerns that a recovery in crude process could lead to a return to the wasteful ways of the past.
In her keynote speech to OGUK’s annual conference in Aberdeen, Ms Michie told firms to keep their eye on the ball and focus on efficiency.
She also highlighted how oil firms have cut average unit operating costs to $15 from $30 over the past two years, and that development budgets for projects have been halved since 2013.
She said: “We are moving forward with cautious optimism, recognising that oil market fundamentals have changed almost beyond recognition in the last 10 years and that they are not going to change back any time soon.
“Bold steps have been and are being taken and we have great examples of companies working differently to improve cost and efficiency and working hard to lock these benefits in for the long term.
“The cynics say that we are a cyclical industry that never learns its lessons,” she said.
“Well this time we have an opportunity to do things differently, especially if we remind ourselves that we have been part of the problem and therefore we all need – including the cynics– to be part of the solution too.”
Meanwhile, First Minister Nicola Sturgeon welcomed new figures showing oil and gas innovation spend in Scotland almost trebled last year.
Funding of £15.9 million from Scottish Enterprise supported 82 companies to deliver 111 innovation projects with a combined value of £43m to develop and maintain companies’ global competitiveness.
This compares to a total value of £14.5m of projects during 2015/16.
The figures exceed a commitment by the Scottish Government to provide £10m to support higher levels of innovation activity within the industry to ensure its long-term sustainability.