Updated: Jul 11, 2018
The phrase "lower for longer" is much-repeated at the moment, no least including SPE Offshore Europe in Aberdeen earlier this month. It has almost become a mantra for the industry, a way of warding off bad luck by showing the world that we are taking the lower oil prices of the last few years seriously.
Some however believe that the slight lift in crude prices in the last few weeks, triggered the closed U.S. facilities, OPEC cuts and draw-downs from the country's national oil stockpile is signalling the end of "lower for longer".
Despite such optimism, companies like Transocean continue to take a long-term look at the industry and their assets, announcing the disposal of six of their oldest offshore rigs this week. General Electric, with a large stake in supplying power turbines and oilfield equipment, continues to look for assets to dispose of as their stock slides further. The last 12 months has also brought a series of high-profile and very interesting M&A deals, particularly in the North Sea as companies look to simplify their portfolios and balance their asset risks.
We may well be entering an era where the oil price not high, but fair, at least for the foreseeable future.
There are still some big challenges ahead though. In the North Sea there is continued pressure for operators to increase oil recovery rates as well as manage their abandonment liabilities. SPE Offshore Europe's conference had its own Decommissioning Zone and theatre for presentations on just his topic. The industry still has not changed enough to understand and embrace these topics as fully as they should moving forwards.
Get in touch with us at PetroMall (info@PetroMall.org) to find out how we can help you manage your assets in these challenging times.