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Alan Savage's February Column

28/02/17

Urgent collaboration to aid the oil and gas industry.

(from the Orion Chairman's monthly column in the Press & Journal)

It’s all very well for the Scottish Government to come up with yet another ‘taskforce’ and now that Nicola Sturgeon has done that we should all be holding her feet to the fire. We need to make sure this isn’t just ‘empty rhetoric’ but we urgently need tangible and practical support.

But let’s not be fooled that the Scottish Government are going to help us weather this storm. With hundreds of job losses, pay cuts and freezes being announced by companies as the price of oil continues to fall, it’s clear that urgent action is needed by the industry itself.

Every day, we hear warnings that our industry is in crisis. The price of a barrel of Brent crude has more than halved in price since last summer to around $50 a barrel.  Despite this doom and gloom, I firmly believe that Scotland - and in particular Aberdeen - will play a critical role in demonstrating its innovative approach and engineering expertise to aid the UK oil and gas industry.

With an estimated 470,000 people currently being employed in the UK oil and gas industry, including over 60,000 from the North East, we all have a responsibility to think differently and work together collaboratively to help our world renowned oil and gas industry.

The Government’s new Energy Jobs Taskforce will not solve all our problems. It will be up to those working in the oil and gas industry to get their sleeves rolled up and start to think differently. We need to be brave enough to encourage investment and drive the type of innovation that will be needed to re-energise our industry but let’s not be fooled, dramatic measures are urgently required.

The oil and gas industry will continue to lobby hard for tax breaks and financial incentives to boost the North Sea.

We have the new regulatory body, the Oil and Gas Authority, coming into formal being on 1 April. Andy Samuel, the new Chief Executive, firmly believes that the measures such as the tax cut and a new basin-wide investment allowance will be effective.  But issues such as rising costs, ageing assets and falling exploration levels further action will be needed to address those challenges – and those challenges won’t be addressed overnight!

In the recruitment business, I’m seeing a general trend from young people hesitating to join the oil and gas industry – what will the future hold?

One of the main aims of the new Jobs Taskforce is to ensure any apprentices who are in danger of being laid off will be offered alternative employment or continued job training. This is encouraging but more comfort is required.

The traditional working arrangement whereby offshore workers have two weeks on and three weeks off has also been under question. This unique working relationship is a part of the industry but will it continue in the current climate?

We need real action from all those working in the oil and gas industry to work collaboratively together.
Recent Comments
The industry has been guilty of short term thinking for a s long as I have been working in it. We know that oil is a scarce resource and that in the long term the only direction that the oil price is going will be up. We know that the industry makes a lot of money when times are good and we know whatever the owners say they have plenty of resources. Now is the time when there are a lot of people who have been laid off, when suppliers are hungry and there is a lot of capacity out there to bite the bullet and invest, put an end to the boom bust cycle and drive up demand. Will anyone listen? I doubt it Im just an expendable number to these people.
steve bennett, 21 February 2015
These are fascinating preiutcs. Thanks for sharing them. I see at your YouTube channel a bunch of KPC related videos. Do you work with KPC or subsidiaries?While I live in US, I have done some work in Kuwait and will soon be doing more, including work for KPC, hence my interest in your topic and content.
Parmila, 30 March 2015
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