Cultural shift key to maximising economic recovery of UKCS oil & gas
Making the most of the UKCS
Sir Ian Wood’s UKCS Maximising Recovery Review, published in February 2014, provides a wide-ranging set of recommendations aimed to address the need for change required to make the most of the UKCS remaining oil and gas resources. But are the Wood Review’s recommendations the right ones? Will they be sufficient to maximise economic recovery of UK resources? And what are the implications for the industry?
Time for change
The United Kingdom Continental Shelf (UKCS) oil and gas basin is a major economic asset with the potential to yield up to $1.3 trillion in revenues over its lifetime but, as the basin matures, the challenges of operating there mount. How quickly and how well both the oil and gas industry and government address these challenges could make billions of dollars of difference to these parties.
Based on in-depth interviews with 23 senior oil and gas executives and investors from 18 organisations, this report identifies the next steps needed to support the Wood Review’s recommendations and the cultural shift required to achieve these.
Behaviours and leadership need to evolve
Whilst sustaining the high health, safety and environmental standards the industry has achieved, work patterns and behaviours suited to a bespoke, high production environment need to be challenged both in industry and government.
What is needed?
- A new style of organisation and leadership, focusing on cost-efficient solutions
- A strong regulator with a clear vision and priorities
- An increase in drilling
- Facilitated access to key infrastructure
- A fit-for-purpose fiscal regime to restore investor confidence
- Closer collaboration between companies, the Oil and Gas Authority and HM Treasury to control costs, manage risks and increase operational effectiveness.
While the changes required may not come as a surprise, achieving these changes will not be easy. Time is critical to avoid decommissioning of key infrastructure. Although it will take time to establish the new regulator, the industry and government must not wait to push forward with these changes and maximise the benefits of the UKCS for all.
View our webinar discussion of the industry research conducted by Deloitte and the cultural shift needed within the industry and government to maximise economic recovery of oil and gas in the UKCS.