LONDON (Alliance News) - Oil and Gas UK Wednesday said it has appointed John Pearson from oil-field engineering firm Amec Foster Wheeler PLC as head of the newly launched Efficiency Task Force, which will try to lower costs and improve productivity among companies operating in the UK North Sea.
The trade association for the offshore oil and gas industry in the UK said the Task Force will attempt to make the sector more competitive and maximise economic recovery from the UK Continental Shelf by working with operators and contractors.
The Task Force will be led by Pearson, who is the group president of Amec Foster Wheeler's North American and CIS operations and the co-chairman of Oil and Gas UK.
"Oil and Gas UK is taking the lead to help drive pan-industry initiatives to secure efficiency improvements and transformational change, formalising those initiatives under the Efficiency Task Force. This action is in addition to key changes already taking place at individual company level," the trade group said.
Pearson said efficiency problems have been at the "forefront of industry minds" for some time but has became "more urgent" due to the collapse in world oil prices which have plummeted from around USD115 per barrel in the middle of 2014 to only USD51 per barrel on Wednesday.
"We?re taking a three pronged approach under the themes: Business Process; Standardisation; and Cooperation, Culture and Behaviours, and are focusing on two or three projects in each. What's essential here is that we don?t try to boil the ocean. We?ve put a lot of thought into where we can have most impact ? and will be working with the industry to see these projects through," he said.
Business process offers the potential for "significant savings" and the Task Force will review the day to day operations of the offshore oil and gas industry, exploring how companies can work together to share resources and good practice.
"As an example, the Efficiency Task Force is working to help companies rationalise their inventories, exploring opportunities for the pooling and sharing of items of high value kit and creating visibility of stock holdings across the industry," said Oil and Gas UK.
The Task Force also will target the efficiency of compression systems in the area, as it believes those systems are responsible for 20.0 million barrels of oil equivalent being lost per year.
Standardisation will aim to simplify business approaches and drive standard solutions in order to lower costs, accelerate delivery and reduce operational complexity.
"Early analysis suggests that simplification and standardisation in areas such as well plugging and abandonment could deliver significant savings," it added.
Lastly, the Task Force will look to "deliver the behavioural change" in the area to allow the North Sea to compete in a lower oil price world.
Oil and Gas UK believes there is another 20.0 billion barrels left to find in the North Sea and is hoping changes to the industry will encourage more exploration as the North Sea is currently one of the more expensive areas in the world in which to produce and explore.
The North Sea industry got a boost last week when Maersk Oil, BP PLC and JX Nippon made the largest discovery in the North Sea for over a decade, striking gas in the Culzean field, which is thought to contain enough gas to provide 5% of the UK's total energy needs.
Oil and Gas UK is also confident companies are taking positive steps internally, and said BP has reviewed its inventory management process, halving the number of storage locations, halving the number of inventory items, and generating around USD32 million by selling scrap and materials identified as surplus to the company's needs.
"Companies have already started on the difficult road to reduce costs and become more efficient. Early signs show this concerted effort is paying off, as production from our sector has increased this year and the cost of operating on the UK Continental Shelf is expected to fall by the end of 2016. There is, however, still much more to do. It is imperative we pull together to achieve even greater strides forward," said Oil and Gas UK Chief Executive Deirdre Michie.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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