Oil and Gas Industry Roundup: July 2017

Renown-Oil-And-Gas-Industry-Roundup-July-2017

Welcome back to this month’s industry roundup, where we take a look at all of the biggest stories in the oil and gas industry.

August continues to witness uncertainty across oil and gas, resulting in offshore explorer giant, Ophir, cutting 15% of its staff. It has also resulted in the world’s total energy investment dropping because of the lack of investments in the industry.

However, in more positive news, improvements are being made in the North Sea, which you can read about in our blog post from earlier in the month. The energy industry is also continuing to soar with investments still being made in renewables. The Scottish government has just confirmed plans for a 30-turbine wind farm to be built, which will power 18,000 homes. Health and Safety in the UK offshore oil and gas sector have also significantly improved.

We hope you enjoy this month’s industry roundup, please visit us again next month where we look at the top stories from August.

Improvements-Made-to-Health-and-Safety-in-UK-Offshore-Oil-and-Gas-Sector-Renown-Oil-And-Gas-Industry-Roundup

Improvements Made to Health and Safety in UK Offshore Oil and Gas Sector

Despite a challenging 2016, the 2017 Health and Safety Report has shown that there has been an improving performance.

According to the report by the industry’s trade body, there is a continued focus on safety in the sector.

The report shows that six operators had no dangerous occurrences in 2016 and that serious incidents such as oil and gas releases, falling objects, and fires and explosions are the lowest on record.

Whilst 2016 was a truly tragic year when it came to oil and gas health and safety, due to the helicopter crashes, which took the lives of 13 people, 2017 was much more positive and stated that there were 113 reportable injuries over 50 million man hours worked offshore. This is the second lowest number of reportable injuries since the mid-1990s.

Mick Borwell, Health, Safety, and Environment Policy Director with Oil & Gas UK, said: ‘Our report reflects the industry-wide effort we make to maintain focus on the safety of our people and operations. That effort is paying back in the form of an improving overall performance.’

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World’s Total Energy Investment Falls Because of Upstream Oil and Gas

In 2016, the world’s total energy investment fell to $1.7trillion. This was a 12% drop compared to the $1.9trillion investment in 2015. It is estimated that this decline was due to the lack of spending from the oil companies, which fell by over a quarter.

A report from the International Energy Agency (IEA) found that the world experienced a 9% increase in spending on energy efficiency and a 6% increase in electricity networks. The IEA noted that 2016 was the first ever year where fossil fuel was edged out by the electricity sector.

The IEA said, ‘Falling unit capital costs, especially in upstream oil and gas, and solar photovoltaics (PV), was a key reason for lower investment, though reduced drilling and less fossil fuel-based power capacity also contributed.’

According to Offshore Energy Today, the rapid ramp up of US shale activities has triggered an increase in US shale costs of 16% in 2017 after having almost halved from 2014-16. The oil and gas industry is undertaking a major transformation in the way it operates, with an increased focus on activities delivering paybacks in a shorter period of times and the sanctioning of simplified and streamlined projects.

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Oil and Gas Explorer, Ophir Energy, Cuts 15% of Staff

The oil and gas explorer, Ophir Energy has announced that it will be cutting 15% of its global workforce due to tough trading conditions in the oil and gas industry.

The London based firm is known for its offshore discoveries in Asia and Africa. However, they have said that most of their cutbacks will be affecting corporate roles at their London office, where is expected that approximately half of the jobs there will be axed. Chief Operating Officer, Bill Higgs, is also stepping down.

Ophir has blamed the losses on lower exploration activity, and a disbelief that oil prices will recover. Their reports for the first half of 2017 also showed that production had been significantly lower than expected.

The firm has said that after the restructuring costs of $7m, they are expecting annual savings of $10m to $12m.

Chief Executive of Ophir, Nick Cooper, has said: ‘We have taken certain difficult but necessary decisions to further reduce our cost base.’

Plans-for-a-30-Turbine-Tidal-Energy-Park-Has-Been-Approved-Renown-Oil-and-Gas-Industry-Roundup

Plans for a 30-Turbine Tidal Energy Park Has Been Approved.

Plans to build a 30-turbine energy park off the south-west coast of Islay has been approved by the Scottish government.

The project is expected to create 32 full-time jobs, and create enough energy to power 18,000 homes.

DP Marine Energy and its Belgium-based development partner, Bluepower NV who are both heading the project began the planning process in 2009. Located across three square miles of the Atlantic, the West Islay Tidal Energy Park is expected to be one of the world’s first commercial-scale tidal energy parks.

These plans come as part of Scotland’s Energy Strategy to make a significant contribution to the fight against climate change. Gina Hanrahan, WWF Scotland’s acting head of policy, has said: ‘Scotland’s growing tidal industry is hitting new milestones’, and that they have a ‘third of Europe’s potential’.

Scotland’s energy minister, Paul Wheelhouse, has said: ‘Scotland has a third of the UK’s tidal-stream resources and two-thirds of its wave resources; it is also home to the world’s leading wave and tidal test centre, the world’s largest planned tidal-stream array, and the world’s largest tidal turbine. The West Islay Tidal Energy Park builds upon this strong foundation.’

 

We hope you enjoyed this month’s oil and gas industry roundup! Join us again in September where we will be looking at the biggest stories from August. In the meantime, follow us on Twitter or LinkedIn for daily updates.

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