Aberdeen specialist alerts many at-risk North Sea oil and gas workers


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Despite an oil price rally fuelled by optimism that the coronavirus vaccine will soon be widely available, the likelihood of a recovery in North Sea investment remains slender, experts say.

Given the uncertain outlook for the global economy, North Sea oil and gas ventures are expected to face rising funding competition as investors turn their focus to sectors that tend to have better prospects. Renewable energy comprises these.

The Scottish energy giant is leaving the North Sea with £ 120 million in gas production sector revenue.

A “spike” in work losses may be inevitable as the Coronavirus Furlough scheme comes to an end in the spring.

Nevertheless, bargain hunters can decide that it is now a good time to buy North Sea assets as difficult times in the industry promote sector consolidation.

Since October, the price of Brent crude has risen around 40 percent, and good news from the coronavirus vaccine front is expected to raise energy demand.

Yet it seems to be accepted by analysts at leading accounting firms that the outlook for the U.K. Although the macroeconomic picture may have brightened in recent weeks, the North Sea has not changed much.

In response to the economic uncertainty caused by the Covid 19 coronavirus crisis, oil and gas companies have scaled back investments in the region this year. The price remains well below the average of about $70/bbl in January, at about $51.40 per barrel of Brent crude.

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In order to allow companies to dust off plans to invest in North Sea ventures, it will possibly take a stronger and longer rally in oil and gas prices.

“Recovery, even in the most optimistic Covid 19 scenarios, will take time.”It will take time to recover, even in the most optimistic Covid 19 scenarios.

He added: “The fundamentals of the global supply and demand market suggest that we are in a period of sustained oversupply, which puts downward pressure on oil prices. This could, in turn, dampen some investment plans.”

“In general, investment plans tend to reflect the long-term economics of projects in a sector where traditional hydrocarbon capital allocation is increasingly competing with low-carbon spending.”

A similarly cautious tone was struck by Martin Findlay, senior partner in KPMG’s Aberdeen office.

He said, “The sector has been hit hard and as businesses weigh their options, it will take some time to regain lost ground.” While several capital projects have been unexpectedly stopped, the process of reactivation is typically slower.

“Mr. Findlay added, “As access to funding sources becomes more difficult as investors become bolder and more interested in green financing options, the ability to finance projects could be the biggest challenge going forward. “

If the government provides proper support, floating wind farms could drive North Sea resurgence, experts say,

Although challenges are likely to be important in developed areas of the North Sea, hope remains that there is potential in relatively under-explored regions.

“The west of Shetland remains a hot area and investment will continue there, alongside other areas of the basin,” Stevenson said.

He noted that investment in renewables and the decarbonization of the output of oil and gas would generate useful supply chain work. In the U.K. The government’s Energy White Paper aims to improve energy transformation initiatives by rendering the basin carbon-free by 2050. The resulting stimulus, however, seems unlikely to be adequate to mitigate the effect of budget cuts on new oil and gas facilities and improvements.

“While the supply chain and operators made significant efficiencies following the oil price collapse in 2014, the scope for savings this time around is much more limited … All of this, combined with the fact that oil and gas companies are still cutting capital spending, suggests that the outlook for the sector is challenging.”While the supply chain and operators have made significant efficiencies following the collapse of the oil price in 2014, the scope for savings is much more limited this time around… All of this, combined with the fact that oil and gas companies are still cutting capital spending, indicates that the industry’s outlook is difficult.

After a year in which the North Sea is estimated to have lost some 12,000 jobs, the sector’s


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