OE 2019: North Sea gains must be sustained, Shell official warns

Sept. 3, 2019

Offshore staff

ABERDEEN, UK – Excessive complexity held back the North Sea industry for many years, said Shell Upstream Director Wael Sawan during the plenary session at SPE Offshore Europe 2019.

The sector had made progress since the oil price fall in 2014, he acknowledged, helped by improved co-operation with governments in the region. “But we need to continue to innovate if we are to achieve the Oil & Gas Authority’s 2035 vision for the UK.”

Shell has played its part by driving down the costs of its North Sea operations by 45% over the past five years, he said, “and that has fundamentally changed the attractiveness of the investment.”

Over the past year, the company took positive investment decisions on seven new UK offshore projects, and will likely spend £700 million ($846 million) annually over the coming years in the sector. “But we need to continue to make it an attractive place to grow,” he cautioned.

Some of the investments have been made to extend the lives of certain fields, such as Penguins in the northern North Sea, which was originally tied back to the Brent C platform. Now Penguins is being redeveloped via an FPSO, with plans to double recovery from the field, pushing production up to 45,000 b/d.

Shell still foresees a need for stronger partnerships with governments and regulators in the North Sea for the conveyor belt of projects to continue. And there will be a need for the UK sector to recruit 40,000 skilled professionals, including data scientists and AI specialists.

That will not be easy, he warned, in the face of strong competition from Google, Facebook, and Amazon.

To bring in the younger recruits, the industry will need to demonstrate its commitment to reducing its greenhouse gas emissions. He cited Shell’s Appomattox project, recently started up, “which is the first facility to use combined cycle power offshore in the Gulf of Mexico.

“This cuts fuel use on the platform by 45%, as well as carbon emissions. But we need more of these types of opportunities.”