Business Outlook 2020 - Autumn Snapshot

BUSINESS OUTLOOK 2020: Autumn Snapshot

Recovering Investment and Activity Levels continued

12,000

It is key that the UK industry remains competitve to retain and attract investment in the face of increased international competition for a restricted capital pool. Whilst the UKCS continues to be a relatively expensive basin in terms of operating costs, recent improvements (a reduction from over $30 per barrel of oil equivalent [boe] to $15/boe in unit operating costs) have helped and it is important these are maintained. Alongside this, it is important that the government reinforces the triple importance of the domestic oil and gas industry and its crucial role in supporting the wider decarbonisation of the UK economy. It is vital that this is emphasised in the forthcoming Energy White Paper, the Licensing and MER strategy review and that the competitveness and stability of the fiscal regime is maintained. It is also crucial that companies are able to continue to safely increase offshore personnel levels to allow more offshore activities to be completed. The number of personnel working offshore at any one time fell by over 40 per cent between March and April as companies reduced activities and looked to minimise personnel exposure risk as far as safely possible. Although offshore numbers have increased in recent months, staffing levels have not yet reached those seen prior to the pandemic. Looking to 2021, 40 per cent of E&P companies and half of supply chain companies have indicated that more than one-third of their 2021 plans are contingent on being able of increase offshore personnel levels. It is important that activity levels on the UKCS keep pace with those in other basins to ensure that it remains a competitive place for supply chain companies to anchor and invest in resources. These capabilities are crucial to maximise the UK’s resource potential, but also will have a vital role in providing the solutions required to achieve a net zero outcome by 2050.

11,000

10,000

9,000

8,000

7,000 Number of People Offshore

6,000

5,000

05-Jul

12-Jul

19-Jul

26-Jul

07-Jun

14-Jun

21-Jun

28-Jun

05-Apr

12-Apr

19-Apr

26-Apr

30-Aug Source:VantagePOB 06-Sep 13-Sep

20-Sep

27-Sep

02-Aug

09-Aug

16-Aug

23-Aug

01-Mar

08-Mar

15-Mar

22-Mar

29-Mar

03-May

10-May

17-May

24-May

31-May

10