Reports of the demise of the North Sea oil & gas industry have been overblown, according to Fircroft.
An analysis by the company has found that prospects for the North Sea oil & gas industry are still positive in the long run, despite increasingly negative reports in the media.
This comes at a time when the government has announced a £20m funding package to support the North Sea industry. Fircroft says that industry giants such as Royal Dutch Shell have also reiterated confidence in the region following its £35bn acquisition of rival firm, BG Group, while the newly opened Laggan and Tormore gas fields off the Shetland Islands reportedly have the potential to provide gas for the whole of Scotland.
Johnathan Johnson, CEO of Fircroft, commented, “The past few months have clearly been a difficult time for the North Sea oil & gas industry but as a company that’s been heavily involved in the sector for over 45 years, it’s our strong view that the market is cyclical and it will only be a short time before business picks up once again. The market has obviously struggled to react to the fact that the value of our product has essentially been cut in half but the UK government, as well as a number of major firms, have invested huge amounts into the North Sea and they’re not going to allow these assets to go to waste.
“Reports suggest that there will be an estimated 22% reduction in the cost of operating existing assets by the end of 2016 and that, supported by the first annual production increase in over a decade, will improve the outlook for the region. We’ve already seen the first gas being lit from the Shetland Islands in the past few weeks and these factors combined with the added investment from the likes of Royal Dutch Shell – along with the anticipated increase in oil prices – are also likely to improve the outlook considerably.”
“It’s clearly been a challenging time for many in the industry and we’re doing all we can to support our colleagues who are at risk of being made redundant, but the future is looking more positive and there should be considerable opportunities around the corner. In the meantime we’ve seen operators look to form strategic partnerships, like that seen between Aberdeen and Pemba in Mozambique which seems to show definite signs of light at the end of the tunnel.”