With 2018 having barely begun, we are already in unfamiliar territory.
At the time of writing, Brent is hovering at around US$69 per barrel, with WTI not far behind at US$65 on the back of strong demand predictions. Average forecasts for the rest of the year look buoyant so far, and range from the mid-sixties to as high as US$70, in the case of JPMorgan. Market optimism is still cautious, but certainly these are prices that have not been seen for some years.
In the midst of this rally, we are also preparing for the Subsea Expo conference in February. Subsea UK will convene its annual event under the theme of “Facing the Future” and will see the sector reflect on what must be done to ensure sustainability and success in the face of a vastly different oil market. Inside this issue of InnovOil, Subsea UK chief executive Neil Gordon offers his perspectives on the industry’s performance last year, and the objectives and challenges for 2018 – amongst them diversification into renewables, and the need for technology to help unlock small pools development on the UKCS.
“It is about rolling our sleeves up as an industry, face the future and be bold. There is a lot of talk about being in a downturn but this is reality – the industry is still very cautious but we have to realise that this is where we are,” Gordon explains.
Indeed, Baker Hughes GE chairman and CEO Lorenzo Simonelli struck a similar note in his speech at the group’s annual conference in Florence this week. Simonelli noted: “The future of competitiveness in energy will be defined by radical improvements in project economics, significant shifts in the way we do business and the ability to balance energy demand and environmental responsibilities. Our industry will face challenges as it navigates continued market volatility, evolving policy priorities and cost pressure, but we cannot forget our focus on productivity or allow old habits to return.” Even with stability and US$70 oil, the industry cannot afford a complacent return to high-price, high-cost practices.
Also inside this month’s issue, we speak with marine engineering group Wärtsilä about its contribution to a pioneering new shuttle tanker design from Teekay. In particular, it has developed a new capture system that recovers compounds from crude cargos while loading, which can then be used as fuel to power the vessel back to shore.
We also look at Statoil’s permanent seismic strategy for Johan Sverdrup, CO2 EOR in Abu Dhabi and new P&A technology grants from the UK’s Oil and Gas Technology Centre.
For all this and more, read on. The team and I are please to present the February issue of InnovOiI.
Subsea Expo takes place from February 7-9 at Aberdeen’s AECC