UK’s oil and gas industry, which has seen massive job losses this year as a result of the global slump in oil prices, could disappear altogether. With oil price stays low, companies in the sector are running out of options other than to shut down or sell themselves off for low valuations. It is going to be a sad day as there is now a very real danger that operators will desert the UK Continental Shelf. Investment in the North Sea with oil at $45 dollars a barrel is not economically viable. If the oil and gas producing fields shut down, it will be almost impossible to re-open them. With the Saudi and Russia compete to keep oil price low, say goodbye to the UK oil and gas sector. The US is next.
4 replies (most recent on top)
Why do you think that it will be impossilble to re-open North Sea´s wells? Is it because of the formation or is it a concern of laws?
Britania will never fall...
Stay and watch, before Christmas oil price will fall bellow $30 and will stay for very long time to low level. Now we are in 2015 !!!! not 1980 the demands has changed. Out there in the market now there are more options for renewable energies. US, India and China won't be anymore the main consumers for oil. Already in India are a lot o cars and buses that are using CNG also in the Central Europe and East Europe there is a trend increase for cars using CNG. This is only a very small detail why the oil will never be back where it was before. Very true that the companies in UK sector are going to run out of options and soon there will be a lot of shut downs. In UK is very expensive to drill. It take between 3-4 months to drill a well offshore in UK sector, in Saudi Arabia take like 3-4 weeks. The cost to produce a barrel of oil in UK is $60 and in Saudi Arabia is $ 9. There is a huge difference. Companies in Saudi Arabia still they make profit even if the oil price is at $20 not the same is happen in UK. High price for oil, soon will be a fairy tail. To understand what is going on now, people in the industry need to have a clear VISION where the oil industry is going.
I bet Scotland is glad they stayed now. Another referendum anyone?