North Sea Costs Creep Higher

[Marina Schwarz + 1,576]

Mixed signals coming from the UK. Costs are down to $15 a barrel but now they're set to rise. Big Oil's leaving but that's fine because PE-backed independents are coming. The government is helping but there's no certainty future governments will help... Meanwhile those decommissioning costs are not going anywhere. So, what's the deal with the UK's North Sea, has it got a bright future or not so much?

[jaycee + 348]

53 minutes ago, Marina Schwarz said:

Mixed signals coming from the UK. Costs are down to $15 a barrel but now they're set to rise. Big Oil's leaving but that's fine because PE-backed independents are coming. The government is helping but there's no certainty future governments will help... Meanwhile those decommissioning costs are not going anywhere. So, what's the deal with the UK's North Sea, has it got a bright future or not so much?

Costs are rising for the simple fact oil price is rising so workers now being taken on are demanding higher rates added in suppliers and vendors are doing similar. Prices were driven down in the bad times as there was no demand so procurement departments and HR drive hard bargains. All cost cuts are temporary though as you can drive costs down when oil is low but you cannot sustain that when oil rises because of previous cost cutting the workers and equipment is now in short supply. Happens everytime like clockwork nobody learns from the past least of all the accountants running the companies.
The new frontier in the UK sector is near Shetland. Its very different geology to the rest of the NS, more similar to offshore Thailand, but once the extraction methods are fully operational, Hurricane have an FPSO hooking up early next year, I expect a large gold rush to happen up there.