THE TIMES (UK): Oil major commits to staying in UK for a decade: “SHELL has promised to maintain its North Sea oil operations for at least the next nine to ten years, a commitment intended to calm fears that the oil major will abandon the dwindling oil and gasfields of Britain.” (ShellNews.net) 13 Nov 04
By Peter Klinger
November 13, 2004
SHELL has promised to maintain its North Sea oil operations for at least the next nine to ten years, a commitment intended to calm fears that the oil major will abandon the dwindling oil and gasfields of Britain.
The oil company is sending drill rigs further into the Atlantic in an attempt to replenish its dreserves and Tom Botts, head of Shell’s european exploration division, said that the company would not turn its back on the North Sea, its historic profit centre, at a cost of thousands of jobs.
He was speaking as Shell this week formally opened the £300 million Goldeneye gasfield, offshore of Aberdeen, which can produce 3 per cent of Britain’s daily demand.
Anxiety is growing in Aberdeen, capital of the UK oil industry, over signs that the major oil companies are shifting capital from the ageing North Sea to brighter prospects in Russia, Central Asia and Africa. In July, ENI, the Italian oil giant, closed its Aberdeen office, laying off 60 staff. Amicus, the trade union, reckons that 1,500 jobs have been lost already in the UK oil drilling industry.
Graham Tran, an Aberdeen-based official for Amicus said that Shell’s commitment was “excellent news” but that concerns remained over the lumpy levels of oil and gas exploration.
He said that while the union was against a general tax hike for the industry, which could jeopardise further investment and jobs, it did propose an “inactivity tax” to penalise those companies which sat on their acreage without carrying out exploration work.
Mr Tran said: “What we want to see is long-term stability in terms of drilling activity. If Shell, for example, want to invest in the North Sea, fine. If they don’t, what they’re sitting on should be given up.
“We don’t want any tax increases here — that is not good for the industry. But at the same time you can’t have an industry held to ransom by a few who block acreage.”
Mr Botts said that the push for new major discoveries in the Atlantic Margin was brought about by the decreasing size, and increasing technical complexity, of the North Sea’s traditional reservoirs.
Shell would, however, continue to explore the areas around its existing North Sea production assets for new finds. Any such discoveries are likely to be small but can be tied into the existing infrastructure, such as pipelines, at relatively low cost.
He said: “The idea that the North Sea is old and dying and the majors are leaving is nonsense. There’s at least as much to play for in the North Sea as has been produced.”