Oil and gas boss cuts ribbon on £20m expansion of Nigg Energy Park
The ribbon has been cut on a £20m expansion of Nigg Energy Park, despite an industry-wide downturn which has seen 65,000 jobs lost in less than two years.
Global Energy Group’s new fabrication facility near Inverness was opened by Oil and Gas Authority chief executive Andy Samuel on Friday morning.
Work on the expansion began in March 2014, when the value of oil was more than double its current price - $101 a barrel compared to $45 today - and rising.
The company has invested more than £45m in the complex in the last three years and says it remains confident that it will be able to continue to attract customers.
Terry Savage, vice co-chairman of Oil and Gas UK said: “This is a particularly tough time for our industry but this extension to existing facilities is a fine example of where a company has the foresight to invest in modernising its assets and extending its capabilities to ensure it is fit to respond to current and future economic challenges.”
Oil and Gas UK estimates the number of people employed across the British sector has fallen by 15% since the start of 2014, from 440,000 to 375,000, with Scotland thought to have been worst hit by the cutbacks.
GEG chairman Roy MacGregor added: “This additional £20m spend in these world-class facilities at Nigg Energy Park highlight to our customers, the provision of a 1000 meters deep-water quayside space, in addition to our dry dock facility with supporting fabrication facilities and lay down areas.
“I feel this investment highlights to the oil and gas and wider energy industries we are open and ready for business.”
The cost of a barrel of Brent crude hit a high in June 2014, but plunged to less than $50 in the second half of the year before recovering slightly and hovering around $58 a barrel in the first six months of 2015.
Despite the slump, the oil and gas industry is worth around £40bn to the UK's economy each year and 2015 is likely to see the first increase annual production increase for 15 years, largely thanks to the new Golden Eagle field, which began producing oil last year at a rate of up to 18,000 barrels a day.
The UK’s oil and gas output has fallen from around 130,000,000 tonnes a year in 1995 to less than 40,000,000 last year in the face of sharply rising production costs, according to the latest figures.
Cuts introduced in the wake of the downturn are likely to save the industry £2bn by the end of 2016.