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SPE Offshore Europe: five trends for the future of the oil and gas industry

Joseph Flaig, at SPE Offshore Europe

(Credit: think4photop/ iStock)
(Credit: think4photop/ iStock)

Just over the horizon from the hulking rigs of the North Sea, the biennial SPE Offshore Europe conference ran this week in Aberdeen.

Delegates and exhibitors from around the world flocked to the coastal Scottish city for the largest free event of its kind, to meet and discuss the state of the oil and gas (O&G) industry.

Our reporter Joseph Flaig attended to hear about the cutting-edge technology and engineering marvels which are transforming the industry – here are five of the most-discussed topics of the week.

Decommissioning

(Credit: brazzo/ iStock)

(Credit: brazzo/ iStock)

Without a doubt the biggest theme at the conference as the industry adapts to the challenge ahead. More than 100 platforms will be removed and upwards of 1,800 wells plugged in the UK and Norway’s share of the North Sea over the next decade.

Despite the huge cost – an estimated £17.6 billion in the UK continental shelf until 2025, or 53% of spending – decommissioning brings no returns for operators, so exhibitors and speakers at OE17 vied for attention as they promoted cost- and time-saving procedures.

The conference had a dedicated decommissioning zone for the first time, and industry bodies held evening events on the topic for hours. Despite the penny-pinching approach to such an unprofitable process, some speakers discussed hi-tech new tools for well abandonment, such as ferromagnetic cement and accelerated corrosion.

Others, such as Zero Waste Scotland, asked delegates what would happen to their dismantled rigs and called for more re-use and recycling of the huge steel structures.

The slump

(Credit: iznashih/ iStock)

(Credit: iznashih/ iStock)

One of the reasons for the vast scale of decommissioning is an industry slump which began in 2014 with slashed oil prices. It has since claimed about 350,000 jobs, and caused 71 bankruptcies last year – up from 52 in 2015 and 11 the year before.

This year’s conference was the first since 2015, meaning industry experts were only now assessing the slump’s full impact. A common call – from regulators, associations and private companies alike – was for more collaboration between fiercely competitive businesses.

Despite early fears that the hard times could hit conference attendance, most exhibitors seemed pleased with the numbers by the end of the second day.

New realities

The author tries Lloyd's Register's VR program

The author tries Lloyd's Register's VR program

Walking around the vast halls of the conference, figures were spotted at booths and stands on practically every aisle exploring new virtual and augmented realities (VR/ AR).

Companies including Lloyd’s Register demonstrated their headset-based programs, which could help train offshore workers.

Representing colleagues with crash-test dummies, the “commercial ready” Lloyd’s VR program tests workers on the risks presented by three hazardous situations. Handed an inspection and answering tool, users have just over a minute to quickly spot the risks and make the right change – make the wrong move, and the dummies are thrown, whipped or squashed in cinematic slow-mo.

The training is “far more engaging” than traditional methods, said Lloyd’s Peter Richards. “You can see the impact that you can have on a real person,” he said. “You don’t want to glorify the incident but you really do have to learn the impact.”

Industry cyber-threat

(Credit: scyther5/ iStock)

(Credit: scyther5/ iStock)

After high-profile global cyber-attacks on industries, energy providers and public bodies, such as the spread of the WannaCry ransomware in May, cyber-security was understandably high on the agenda in Aberdeen.

Despite accusations of lagging behind other industries like the aerospace and automotive sectors, oil and gas (O&G) is now embracing the efficiency savings and safety improvements offered by digital technologies – and facing the attendant cyber-risks. Figures show almost 68% of O&G companies were hit by at least one “significant” cyber-incident in 2016.

Experts like Oil & Gas UK urged businesses to share vital information on hacks to help overcome the challenge, and technical adviser DNV GL launched a new set of “globally applicable” security recommendations.

A brighter future?

(Credit: nielubieklonu/ iStock)

(Credit: nielubieklonu/ iStock)

During the conference, industry representative organisation Oil & Gas UK published a report claiming investors are rewarding North Sea operators for “re-inventing” themselves.  

Almost $6 billion of mergers and acquisitions took place in the UK sector in the first half of the year, the body said. Production in the North Sea basin has increased by 16% since 2014, and operating costs have dropped, halving the cost of lifting oil.

Challenges remain, said Oil & Gas UK – drilling is at record lows, only three new field approvals have been sanctioned since the start of 2016 and low activity could further threaten jobs. However, chief executive Deirdre Michie said the organisation is “hopeful that the tide is turning and expect employment levels to stabilise if activity picks up.”

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