Energy issues form the backdrop to OE11 event
David Clough sets the scene for a show that puts the sustainability of the oil and gas industry firmly in the spotlight
Offshore Europe is the largest upstream oil and gas event outside North America and is held every two years in Aberdeen. Its location reflects the importance of the North Sea oil and gas industry: the UK Continental Shelf (UKCS) provided 66% of total primary energy requirement in 2009, meeting 94% of the oil demand and 68% of the gas demand.
The consumption of energy in the UK is predicted to rise in the foreseeable future, with the UKCS still expected to provide more than 50% of total oil and gas demand in 2020. The healthy development and sustainability of the North Sea oil and gas industry, therefore, is vital to the future of the UK economy.
The number of oil fields in production has tripled in the last 20 years, and there are plans to develop 70 or more new fields. Up to 24 billion boe (barrels of oil equivalent) are still to be recovered and the 26th licensing round attracted 356 applications the largest number since 1964.
Gas is the fuel of choice and will remain so; gas currently provides 40% of the total energy and 40% of electricity generation. The UK has a greater diversity of supplies than anywhere in Europe with pipeline, LNG and storage capabilities and more are planned.
To ensure continuing development and create sustainability, the industry will be looking to companies to provide smart ideas and use of technology to enable the industry to compete globally for the investment needed.
The Ernst and Young Oil and Gas Industry Business Risk report for 2010 highlights the top-10 risks no surprise that uncertain energy policy is number one. Recent tax changes announced in the budget have only reinforced this issue, causing concern when considering long-term investments.
Cost containment and human capital deficit are ranked three and seven, respectively. Here the application of smart technology to help control costs can be deployed reliable, safe control and automation solutions to optimise production, reduce manpower costs and risks can deliver significant operational benefits.
Smart applications, which capture the best practice of the best operators and utilise these as standard operating procedures, can ensure that processes are always optimally operated. The challenge of leveraging experienced worker knowledge can also be assisted by the use of these smart applications, which supplement the fundamental reliable control and safety functions of automation systems.
An additional risk identified specifically for the North Sea is the ageing oil and gas infrastructure, which could pose serious operational threats to companies and jeopardise their reputations and business relationships. Ageing facilities face reliability and obsolescence issues that will impact both safety and production.
The North Sea oil and gas industry has a sustainable future, which will be enhanced by the use of smart ideas to support the companies and operators who remain our important and valued customers.