INDUSTRY NEWS TIME FOR TRANSFORMATION
It was a year ago that the downward spiral in the oil price started to cause concern in the industry.
We are now faced with a commodity price which, everyone agrees, will be much lower, for much longer than most of us feared this time last year.
The cost-cutting has been severe and project delays and cancellations have had a major impact on many subsea companies. Regrettably, we have seen companies forced into administration with the damaging knock-on effect across the subsea supply chain. Others are struggling to keep their heads above water and there will inevitably be further casualties both in terms of firms and individuals.
After the initial fear, panic and rationalisation, 2015 has ultimately been a year of realisation, a wake-up call to the industry that we have to
make fundamental changes to survive and eventually thrive.
The focus for all of us is now on collaboration and co-operation in a major drive to boost efficiencies and find better ways of working. Most of you will recall CRINE Cost Reduction in the New Era – and the initiatives which came out of this to cope at the time with $10 oil. Some great work was done then, some of which is still in use today, but I would argue that much of it was simply forgotten as the oil price crept back up again.
This time, the low price will be here for some time and we have an opportunity to define our future by truly embedding the behavioural change that will sustain our industry in the long-term and achieve the goals of Maximising Economic Recovery in the North Sea.
Tackling the cost and efficiency challenge is of paramount importance if we are to secure the long-term future of our industry. It’s no longer enough to talk about collaboration and co-operation, the whole industry must act to get operating costs down and fast.
But collaboration must be a two way street, every part of the supply chain must appreciate and understand the objective of the other and work in a way that is aligned to each achieving those objectives. If we can do this, we will be in a much better shape to thrive in the future, rather than just survive.
That’s why the theme for this year’s Subsea Expo is “Time for Transformation”. Leading figures from the regulators, the operators and the supply chain will come together at Subsea Expo to tackle how we need to change, what we can do simpler and more effectively and where we need to reinvent ourselves. This is our time to demonstrate the pioneering attitude and ingenuity for which our industry has been renowned in the past.
While the repercussions of the low oil price are perhaps being more sharply felt in the North-Sea due to its very high cost base, the rest of the world is not immune. However, there are some key regions which standout in terms of short to medium term potential. These are parts of Africa, South East Asia and Mexico.
Companies who are able to spread the risk across several geographical markets are weathering the storm better than others. But it’s not about being a fair weather exporter, subsea firms must all be looking to new markets if they are serious about their long-term future.
British subsea expertise, experience and technology is in demand and Subsea UK will continue in its efforts to help companies capitalise on overseas opportunities. Collaborating with other organisations is an important element of Subsea UK’s strategy and we continue to work with SDI and UKTI to develop a strategic approach to growing the industry’s international capabilities and reputation.
At Subsea Expo we will be examining the best ways forward for our industry and look at where improvements can be made. Where there are tough times there are also opportunities and the rewards are still out there. With the correct approach and cooperation of operators, the supply chain, industry bodies and the government we can ensure the UK’s energy sector continues to lead the world.
p22 |
www.sosmagazine.biz | January 2016
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