Creating a sustainable future for the North Sea oil industry
The massive reductions in oil prices during 2014 caused the oil and gas industry to take a substantial rethink of its method of operation, particularly within the UK Continental Shelf (UKCS).
However, since the downturn, improvements in services and technology have resulted in reduced operational costs and recent rises in oil prices, suggesting business could potentially improve.
Industry experts believe it may be tempting for businesses to start expanding and developing projects in the short term. However, experts emphasize that the critical challenge facing the North Sea is to maintain its longer-term future viability.
Experts suggest it is essential that the industry collaborates more on projects, emphasizing how important it is that operators and suppliers work together to create benefits for both sides. This month, Deloitte launched it's UKCS upstream supply chain collaboration survey which focuses specifically on this topic.
Whilst this may seem quite a simple process, it is something that many industry leaders believe has not been executed effectively.
The Deloitte survey explores the potential benefits of more effective collaboration within the industry. The main benefit of boosted partnerships is the significant costs savings as well as enhanced returns on investments for oil operators.
The report also explores other potential advantages, including how stronger relationships with suppliers is likely to drive further innovation within the sector. The report highlights that some of the leading operators in the supply chain market also have some of the lowest operational costs in the region.
Survey results suggest that more oil and industry members are now considering working towards common goals and looking at the total value and overall costs of a project, as opposed to segmenting it.
More examples of oil operators and supplies collaborating and working together. The Oil and Gas UK Efficiency Hub has been highlighting the range of initiatives targeted at improving efficiency across the UK Continental Shelf. Oil businesses are exploring a range of continuous improvement programmes and encouraging cultural changes. The Efficiency Hub aims to promote raise awareness across the industry and quantify the results of these projects.
The industry has improved this year, but businesses should not become overconfident that the market will continue to rise. Improvements in efficiency have significantly improved the industry and its stability within the UK Continental Shelf. Collaboration is now key and can potentially ensure the industry remains stronger and more resilient to future market changes.
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