Efficiency
prevails The North Sea: life after cost cutting. By Alan McCrae
T
he North Sea Oil & Gas industry has experienced a turbulent time in recent years - the well documented price crash of 2014 led to widespread redundancies, cost reduction and project deferral. But are those changes sustainable in the longer term? It’s certainly a concern for shareholders in oil & gas companies as equity prices took a battering, impacting the portfolios of individuals and pension funds alike. So, if the worst is now behind us, what can companies do to ensure that there isn’t a swift return to the bad old days of escalating costs and inefficiency?
4
ENERGY,oil&gas
energy-oil-gas.com
During the downturn, many commentators predicted a wave of M&A activity as the saviour of the sector - little fish would be swallowed up and we’d see a new breed of integrated Oil Field Services (OFS) players and larger independents. That was more of a ripple than a wave. In the OFS world, a few mergers have materialised such as Amec Foster Wheeler with the Wood Group, Technip and FMC, and GE’s merger with Baker Hughes. But with many of these deals still to complete, we’ve yet to see what this could mean in terms of cost synergies and shareholder return. In upstream, activity has focused on the asset side, for