The UK’s offshore Oil and Gas industry is reported to be in a period of turmoil. Largely caused by the sharp fall in oil prices around the world, the industry’s revenues fell by £24 million in the North Sea basin, the most significant drop since the 1970s.
As a reaction to this, many are concerned that the lack of investment in infrastructural improvements will cost the sector dearly. In 2014 for example, only 14 out of the predicted 25 wells were drilled out, a trend that’s predicted to decline even further going into 2015.
This year it’s hoped that there will be between 8-15 wells drilled, and whilst this isn’t something that’s likely to fill explorers with much enthusiasm, it’s a state of affairs which is indicative of the turbulence that the industry is experiencing, especially in regard to price fluctuations.
Malcom Webb, the UK’s Oil and Gas Chief, has gone onto say that the decline paints a bleaker picture than is necessary, highlighting that the region has a lot of potential and that there is real need for government and industry initiatives to be brought into play in order to secure the region’s long-term success.
There’s real pressure on the supply chain to reinvent itself against the backdrop of falling oil prices, with it likely that companies will look to accommodate for lower demand, and in some cases, put more emphasis on export markets that are less volatile than their home-market.
Clearly a time of unprecedented turmoil for the UK’s oil and gas industry, measures must be taken now to ensure that the industry’s long-term future is guaranteed.