Lessons learned from efficiency changes made to adapt to lower oil prices must be a basis for UK’s oil and gas future that could be delivered by Vision 2035, said Oil & Gas UK CEO Deirdre Michie.
Michie said during an opening session of the Oil and Gas Industry Conference on Tuesday that the focus must remain on efficiency if the industry hopes to maintain the competitive benefits it has worked so hard to deliver.
The head of the industry trade body also added that the positive future for the Basin could be delivered by Vision 2035, an outline for the UK Continental Shelf and supply chain over the next two decades.
During her keynote address, the CEO said: “We are moving forward with ‘cautious optimism’ recognizing that oil market fundamentals have changed almost beyond recognition in the last ten years and that they are not going to change back anytime 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.
“We have halved our average unit operating costs over the last two years from around $30 to $15 per barrel while safely increasing oil and gas production.
“The sustainability of these improvements is always under scrutiny. We know that some of them have been achieved by tough rate reduction, job losses, retendering and, quite frankly, by putting severe pressure on the whole supply chain.
“The cynics say that we are a cyclical industry that never learns its lessons. 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.”
Michie added: “Vision 2035 conceived by the Oil and Gas Authority and shared by industry and other stakeholders, states that we can be a global energy industry, anchored in the UK, powering the nation and exporting to the world. This vision is underpinned by the aspiration to add an additional £290 billion ($374 billion) to the UK economy over time.”
Apart from Michie, the other three speakers during the opening plenary session were Nicola Sturgeon, the Scottish First Minister, Øyvind Eriksen from Aker ASA, and Amjad Bseisu from EnQuest.