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OPEC’s Agreement Sends Oil Prices Soaring

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Oil prices spiked on Friday…

Core OPEC Ramps Up Production Ahead Of Meeting

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Scotland Pulling Out All The Stops To Save North Sea Oil & Gas

Scotland’s energy minister, Fergus Ewing, acknowledges there are “serious challenges” facing the North Sea oil industry, but also “huge opportunities,” and he’s taking that message on a visit to Houston, the unofficial energy capital of the United States.

“It is important that potential investors continue to have confidence in the world-renowned energy sector we have in Scotland, and this week I will speak directly with senior industry representatives emphasizing the Scottish government’s support for the industry and championing Scotland’s excellent oil and gas expertise, workforce and companies,” he said in Edinburgh in advance of his trip.

Related: Three Triggers That Will Send Oil Crashing Again

Scotland’s oil sector has been severely damaged by the 9-month-old plunge in oil prices. Included in that damage are extensive layoffs. For example, Royal Dutch Shell, one of the largest oil companies operating in Britain, announced March 26 that it will eliminate 250 staff and contract positions, and Abu Dhabi’s Taqa will drop about one-fifth of its 500 member North Sea work force.

George Osborne, Britain’s Chancellor of the Exchequer, had hoped to stimulate the North Sea energy economy and avert layoffs with “bold and immediate measures” in its 2015 budget that included a reduction in tax revenue from the region’s oil from 50 percent to 30 percent. That, however, evidently wasn’t enough.

Related: Low Oil Prices Not Enough To Kill Off Oil Sands, Yet

Paul Goodfellow, Shell’s vice president for exploration and drilling for Britain and Ireland, praised Osborne’s effort as “a step in the right direction,” but said it’s up to energy companies themselves to improve profitability through cost-cutting and other measures if they want to attract investors.

Despite the recent slump in the North Sea oil sector, sales by Scottish oil companies were nearly $33 billion in 2013, up 11 percent over 2012. And the leading customer for foreign oil remained North America, whose imports totaled $6 billion in 2013, up by more than one-third over the previous year.

In an interview with Scotland’s STV, Ewing said Scotland’s oil industry is important “not just in the resources that we extract, but the expertise and knowledge that we have developed,” particularly in offshore drilling technologies.

Related: Iran “Deal” Could Leave Oil Markets In Limbo

“The international oil sector is currently facing significant challenges,” Ewing said, “but I believe firmly in the value that Scottish businesses deliver to partners, particularly in deep-water and offshore exploration areas, and their ability to overcome those challenges.

“Decades of research and development has been cultivated in the North Sea and is now being deployed globally,” Ewing said, “transferring to new and emerging exploration and production locations around the world.”

By Andy Tully of Oilprice.com

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