On January 21, Total CEO Patrick Pouyanne said the French energy major will cut spending on ageing North Sea fields after the recent plunge in oil prices. A string of companies with operations in the North Sea, including British super-major BP, announced plans toscale backtheir interest as oil prices continue to fall.
Speaking at a panel session at the World Economic Forum in Davos, Switzerland, Pouyanne said he expected oil prices to remain low in the first half of 2015 after falling almost 60% since June to below $50 a barrel.
Investment in North Sea, home to the benchmarkBrent crudeoil, “will be diminished” even as oil prices recover, Pouyanne said, adding that handsome returns from mature fields such as the North Sea were being cut short by the recent collapse in the oil price.
He added that tax sweeteners from the UK Government might not be enough to revive the industry, as oil majors faced lower returns in the “fight against the decline of mature fields”.
Shadow chancellor Ed Balls has called for immediate tax breaks to help the North Sea oil industry.
“The plummeting global oil price has given some respite to motorists and has been good for the UK economy overall, but there is no doubt that it has also had a negative impact here in the North East of Scotland,” he said. “Hundreds of jobs have already been lost, with thousands more at risk.” Chancellor George Osborne recently said that he would look at ways to boost the oil and gas industry in the next budget.
However, despite the low oil prices, Upstream recently reported that the forecasted oil and gas activity in the North Sea for 2015 is to remain about the same as 2014.
http://www.neurope.eu/article/total-cuts-north-sea-projects-after-oil-price-drop