Experienced supply chain professionals needed to help recover North Sea oil and gas

Gurjit Degun
25 February 2014

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25 February 2014 | Gurjit Degun

The government should appoint a regulatory body to attract “experienced personnel” from the supply chain to help it recover an additional three to four billion barrels of North Sea oil and gas.

The Wood Review, a report commissioned by the government on maximising recovery from the UK continental shelf found the British economy could benefit from a potential £200 billion boost over the next 20 years.

The government said production has fallen by 40 per cent in the last three years, and the efficiency with which oil and gas is produced has fallen to 60 per cent, costing the economy £6 billion.

“The UK is reliant on North Sea oil and gas for more than half of total oil and gas used, and will continue to need around 70 per cent of gas in the energy mix out to 2030,” it added.

Ian Wood’s review set out a number of recommendations including introducing a regulator to “significantly enhance the level of co-ordination and collaboration”.

Wood said that the regulator “should help foster an attractive business environment able to attract the best operators and supply chain”.

“The success and reputation of the regulator will be determined by the calibre of people it attracts and retains,” the report explained.

Poor contract management, planning and execution efficiency, leading to high cost offshore operations was raised on a number of occasions in the review. Wood said the industry must work through such problems.

“Skills shortages, particularly at high end technical levels are a problem and unit production costs have increased significantly as has the time taken to carry out major refurbishments and shutdowns.

“This is not helped by the very large number of self-employed contractors working within both the operators and the supply chain contractor organisations,” the review noted. “These are challenges the industry must work through and solve.”

The government said that it will take the recommendations on board and will develop plans for a new arm’s length body.

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