Despite a recent spike in oil prices, energy industry chiefs warn that infrastructure investment in the North Sea will not jump in tandem.
Scaring investors away is market volatility, they say.
Bosses from the oil and gas sector gathered last week in the Scottish coastal city of Aberdeen for an industry conference that delivered little optimism regarding the outlook for North Sea development.
Oil & Gas UK, an organization representing Britain’s offshore energy industry, hosted the Aberdeen gathering amid a sharp domestic downturn that has curbed business investment across the country.
“Businesses have already found 2009 a turbulent, tough year and the UK offshore oil and gas industry is no more immune to these pressures than the rest of the economy,” Oil & Gas UK said in a statement. “There is growing concern that the rapid fall in oil prices and the freezing of capital markets will impair investment and suppress production in the North Sea, with wider implications for companies and employment across the supply chain.”
Oil prices, despite a solid rally in recent months, languish more than 50 percent beneath record highs struck one year ago.
“Even the short term, recovery in oil prices of the last two or three months is way too early to positively impact people’s decision [to invest] in the long term,” Bob Keiller, chief executive of energy industry services provider PSN, said.
“The volatility [of oil prices] has affected the confidence in investments,” added Keiller in Aberdeen, a city whose wealth has ballooned since the discovery of oil in the neighboring North Sea during the 1970s.
According to Oil & Gas UK, expenditure on North Sea exploration was down 70 percent at the start of this year compared to a year earlier.
Investment that totaled £5 billion (US$8.1 billion) last year could fall to £2.5 billion this year, the industry body said.
Malcolm Webb, president of Oil & Gas UK, said that erosion in capital expenditure for North Sea exploration had begun in 2006, when oil prices were far below current levels.
“Our statistical review shows that UK [oil] production has dropped 38 percent since 2000 to 2008. When I listen to people discuss what I call the ‘seductive run up’ in oil price, I am worried that this is masking a much less talked about fact — gas prices. They continue to fall. When you assume that 50 percent of North Sea production is gas, the average North Sea realization today is still around US$40 per barrel of oil equivalent,” he said.
Soaring costs of exploration have hampered the industry, one expert said.
“Between 2004 and 2008 the cost of operations has more or less doubled,” said Alex Kemp, professor of petroleum economics at the University of Aberdeen Business School.
ANNOUNCEMENT: People who do not comply with the ban after a spoken warning would be reported to the police, the airport company said on Friday Taoyuan International Airport Corp on Friday announced that riding on vehicles, including scooter-suitcases (also known as “scootcases”), bicycles, scooters and skateboards, is prohibited in the airport’s terminals. Those using such vehicles should manually pull them or place them on luggage trolleys, the company said in a Facebook post. The ban intends to maintain order and protect travelers’ safety, as the airport often sees large crowds of people, it said, adding that it has stepped up publicity for the regulation, and those who do not comply after a spoken warning would be reported to the police. The company yesterday said that
QUIET START: Nearly a week after applications opened, agencies did not announce or promote the program, nor did they explain how it differed from other visitor visas Taiwan has launched a six-month “digital nomad visitor visa” program for foreign nationals from its list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts. To apply, foreign nationals must either provide proof that they have obtained a digital nomad visa issued by another country or demonstrate earnings based on age brackets, the Bureau of Consular Affairs said. Applicants aged 20 to 29 must show they earned an annual salary of at least US$20,000 or its equivalent in one of the past two years, while those aged 30 or older must provide proof they earned US$40,000 in
SERIOUS ALLEGATIONS: The suspects formed spy networks and paramilitary groups to kill government officials during a possible Chinese invasion, prosecutors said Prosecutors have indicted seven retired military officers, members of the Rehabilitation Alliance Party, for allegedly obtaining funds from China, and forming paramilitary groups and assassination squads in Taiwan to collaborate with Chinese troops in a possible war. The suspects contravened the National Security Act (國家安全法) by taking photos and drawing maps of key radar stations, missile installations and the American Institute in Taiwan’s headquarters in Taipei, prosecutors said. They allegedly prepared to collaborate with China during a possible invasion of Taiwan, prosecutors said. Retired military officer Chu Hung-i (屈宏義), 62, a Republic of China Army Academy graduate, went to China
UNITY MESSAGE: Rather than focusing on what Trump said on the campaign trail about Taiwan, Taipei should be willing to engage with the US, Pompeo said Taiwan plays a key role in Washington’s model of deterrence against China, former US secretary of state Mike Pompeo said in a speech in Taipei yesterday. During US president-elect Donald Trump’s first term, “we had developed what we believe was a pretty effective model of deterrence against adversaries who wanted to undermine the set of rules and values that the people of Taiwan and the people of the US hold dear,” Pompeo said at a forum organized by the Formosa Republican Association. “Succeeding in continuing to build this model will not solely rest at the feet of president Trump and his team,
RSS