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9 comments on UK Energy Trends, Q206

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andyh on October 1, 2006 - 9:48pm Permalink | Subthread | Parent | Comments top
Isn't some of it at least down to that idiot Brown in No11 Downing Street? I thought recent tax changes he made to the North Sea regime penalised future exploration/development; at least the oil firms were not at all happy about it as I recall.
I suppose his typical tax grab may have the unexpected benefit of keeping the oil in situ for longer.
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Nick Rouse on October 2, 2006 - 3:41pm Permalink | Subthread | Parent | Comments top
Yes, but he made up for this by going to OPEC and telling them that it was their duty to produce more oil. So that's alright then.
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MUDLOGGER on October 2, 2006 - 3:49pm Permalink | Subthread | Parent | Comments top
Tax has played a part in suppressing activity. But there are other culprits too.

1. Rig Count: During the 90's and into this decade, the rig utilisation rates were quite poor and a lot of rigs left the UKCS , never to come back. A few have come in since, but not in the same numbers.
What rigs stayed, are now fully utilised and look to remain so for the next two years + . But, the numbers available are not the same as the halcyon days of the 80's.

  1. People: There is a world wide shortage of experienced hands. Many left the UKCS in the 90's and 00's to work elsewhere, when work was hard to find. Again, a lot have not come back.
  2. Opportunity: Oil Majors have little to explore for in the UKCS. New entrants of course have filled the gap, but share buy-backs seemed to be a better way of spending money than exploration. The alternative of 'drilling on Wall Street' led to the acquisition activity of the 90's and early 00's.
  3. Risk: Rig and manpower and entry costs have ramped up. Gordons tax raid created uncertainty and the North Sea + Atlantic margin is a high cost area. So exploration dollars go to areas where there is lower cost and a reasonable chance of finding an elephant.

No amount of drilling is likely to reverse the UK trend. There are occassional reasonably sized finds, such as Buzzard, and in-field, extended reach drilling from existing infrastructure can extend lives of fields, but  short of a miracle, the trend is unlikely to be reversed.
New Forties, Brents etc are very unlikely. We may drop lucky and find the odd Buzzard.

As for the last 9 years of UKGov, the lack of any coherent energy policy and the hosing of money in foreign adventures and other ego projects will be seen by historians as the greatest catastrophe to ever hit Britain.

Probably since the Romans legged it.

The historians are more likely to be scribbling away by the light of candles than any other light source if we carry on this way.

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