The rapid fall in the price of oil over the past six months has thrown up numerous challenges for the industry.
Malcolm Webb, chief executive of industry body Oil & Gas UK, commented; “the UK offshore oil and gas industry faces difficult times.
“In the past three years, exploration activity has slumped, production has declined by 40 per cent and operating costs have risen by 40 per cent. We now see a $40 fall in the price of oil.”
Whilst the price fall will reduce the cost of a range of commodities and boost the growth of the global economy by 0.5 per cent, it will have major implications for the oil and gas sector. A key issue will be exploration projects being rendered uneconomic due to falling prices.
For Paul Snell’s full discussion on the challenges facing the oil and gas industry, see the latest edition of Supply Business