THEY say life begins at 50.
I don’t agree (based on experience so far) as I think I lead a pretty full life but we do all change as we move through the decades.
As the UK Continental Shelf ploughs through its 50th year, it is clear that it has lived a lot too.
We have seen 50 years of exploration, production, innovation and global firsts.
We have seen our supply chain expand and it now contributes over £10billion to our economy through international sales.
People say we have “been here before” but moving into the sixth decade, it actually feels like we are moving to a new place.
It looks like large-scale decommissioning could be about to happen.
Nearly 80% of respondents to our oil & gas survey undertaken in partnership with Bond Dickinson told us they are “already” or “likely to be” involved in this area in the next year or so.
If we follow the successes of the past, perhaps being at this frontier can help us be a global leader in this field too.
However, it is too early to say that the UKCS is slowly closing down.
It looks like the industry has a real opportunity, if it can grasp it, to lead the way as a highly efficient (low cost) basin.
It is also true that if exploration can be made more attractive there is still plenty to go for.
This is the positive context in which we should look at the gloomy sentiment which exist.
The survey told us:
- Confidence has never been lower
- We are experiencing a “recession of confidence” ie two surveys in a row in negative territory for the first time
- To expect a negative outlook for at least a year ahead (likely to be more)
- International sentiment is also negative (although less than the UKCS), reflecting the global nature of the current downturn
Life doesn’t begin at 50 but at this point the industry does need to change, like we do as people.
The industry may need to downsize to take account of lower levels activity in the UKCS.
The industry needs to cut costs or more importantly increase productivity and efficiency.
We should not miss the opportunity that a midlife crisis presents to secure a new positive future.
Read the 22nd Oil & Gas Survey and let us know your views at business.bulletin@agcc.co.uk.