Here’s some much-needed good news for the UK’s energy interests: oil companies operating in the North Sea are finding new ways to trim costs and—surprisingly—continue to turn a profit in the region’s maturing fields. The FT reports:
Average operating costs in the UK North Sea have fallen 45 per cent since the crash from $29 per barrel to about $16, according to Oil & Gas UK, the industry group. Much of the savings have come in the form of worker lay-offs, and service providers being forced to accept lower payments from producers. But more efficient ways of working — from simplification of well designs to pooled procurement of ships — have also played their part.This is a pattern similar to what we’ve seen in America’s shale industry: firms that had perhaps grown comfortable with a prolonged period of $100+ per barrel crude have been forced to take a long, hard look at their operations and identify areas in which they’re capable of trimming the fat....MORE
“We’ve seen improvements around the world in productivity … but possibly the most impressive has been in the North Sea,” says Simon Henry, chief financial officer of Royal Dutch Shell.