Wireline - Summer 2017

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W I R E L I N E | SUMMER 2017 | 5
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
And turn t r 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:
• 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
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