Wireline - Summer 2017

News

1. Business Outlook highlights urgent need for fresh investment Oil & Gas UK’s Business Outlook provides an authoritative insight into the sector’s recent performance and prospects. It reveals that the industry is now in better shape to compete for much-needed investment and confidence is slowly returning following an intensive two-year drive to improve efficiency, streamline costs and boost productivity. However, exploration remains at record lows and the basin urgently needs fresh capital to stimulate activity. “Confidence is slowly returning to the basin,” says Michael Tholen, upstream policy director. “The revival is led chiefly by exploration and production companies which may collectively see a return to positive cash-flow for the first time since 2013, provided costs are kept under control and commodity prices hold. “However, this is unlikely to translate immediately into reinvestment or increased activity. It is crucial that existing projects are progressed efficiently through to development and new ones matured to avoid a potentially significant production decline after 2020 and provide much needed business opportunities for the supply chain.” Download a copy of the full report, access quick facts and figures, and view videos outlining the key findings at www.oilandgasuk.co.uk/businessoutlook.

And turn to p15 for an interviewwith Oil & Gas UK’s chief executive Deirdre Michie for more on the sector outlook, Oil & Gas UK’s priorities and the industry’s vision for 2035.

2. Study examines Brexit’s impact on industry Oil & Gas UK has written to the Prime Minister highlighting findings from research that assesses the potential impact and opportunities of Brexit for the sector. The study, commissioned by Oil & Gas UK, looks at the implications for trade costs and labour movement. Under a worst-case scenario, where the UK reverts to World Trade Organization rules with the EU and the rest of the world, the likely cost of oil and gas-related trade will almost double to around £1.1 billion per annum; assuming trading behaviours remain unchanged. Meanwhile, skilled roles filled by EU workers are often critical for projects and Oil & Gas UK asks government to consider these posts when developing domestic immigration policy. Industry is becoming more globally competitive, but remains sensitive to any additional burdens in relation to cost, or restrictions on the movement of key personnel required for critical operations. Oil & Gas UK recommends the UK Government prioritises the following during negotiations:

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• Smooth access to markets and labour • Maintaining a strong voice in Europe • Protecting energy trading and the internal energy market

Deirdre Michie, chief executive of Oil & Gas UK, adds: “We would welcome discussions with government officials to outline industry’s concerns and opportunities and help identify a path forward during Brexit negotiations. Our request of government is that any change, whether domestic or European, is managed in a manner that minimises risk to the oil and gas industry and provides predictability and clarity wherever possible, through constructive dialogue and consultation.”

Readmore about the findings at www.oilandgasuk.co.uk/brexit-and-the-uk-oil-and-gas-industry.

W I R E L I N E | SUMMER 2017 | 5