Aberdeen Oil Tycoon Hails Signs of Recovery in North Sea after Tough Times

Graphic for News Item: Aberdeen Oil Tycoon Hails Signs of Recovery in North Sea after Tough Times

OIL tycoon Sir Ian Wood has said the North Sea industry appears to be recovering from the crude price plunge as he hailed the success of efforts to reduce North East Scotland’s reliance on the sector.

Sir Ian expressed despair about the state of the Brexit process but said the UK’s departure from the European Union could create big opportunities for the fishing industry, which is a mainstay of the Aberdeenshire economy.

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He was speaking after highlighting the impact made by Opportunity North East through its efforts to help broaden the base of activity in the area.

The development body has won £62m million support from the Wood Foundation he established.

It was launched in December 2015 as the impact of the crude price slump hammered the oil industry heartlands around Aberdeen, posing big challenges for firms such as the Wood group services operation Sir Ian developed from a fishing business.

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He appears to think the downturn has triggered a shake up in the North Sea oil and gas industry which will leave it in better shape for the future, albeit in a much smaller form than before oil prices peaked in 2014.

“I think the oil and gas industry had a really, really rough time for two or three years and I think it actually changed the industry. There were huge reductions in people and a big drive towards efficiency,” noted Sir Ian.

He added: “We’re in better shape than we were because we’ve got a somewhat smaller industry, it’s leaner. There’s been some good new companies joining.”

Sir Ian’s comments draw attention to the process which has seen majors cut their exposure to the North Sea by selling assets to new players, including some backed by international financiers.

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This has seen what Sir Ian described as “really pretty good new medium sized companies” doing an effective job of recovering more oil and gas from existing reservoirs while also developing new fields.

“Depending on what happens with the various climate change edicts that are coming out if the oil price stays at $60 to $70 (per barrel) I think we will go a long way to recover,” said Sir Ian.

But the future prospects of the industry look much more modest than they did amid the boom that ended in 2014.

“We’re nowhere near where we were three or four years ago, this is a different smaller industry but hopefully we’ve got 10 to 20 billion barrels of oil and gas still to come,” observed Sir Ian.

Against that backdrop he has been pleased by the progress Opportunity North East has made to support the development of industries ranging from renewable energy to food and drink under chief executive Jennifer Craw.

“We’ve still got more to do but there’s now a realisation that we’ve got a huge challenge up here with North Sea oil over the next 30 or 40 years,” said Sir Ian, adding: “We’re going to come down significantly by 2050 so I think everyone now recognises that challenge and we’re working pretty hard across a range of initiatives to broaden our economy and strengthen our economy.”

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Sir Ian’s confidence in the initiative was reflected last year when the Wood Foundation increased its initial commitment of £29m by £33m.

Asked about Brexit and the possibility of another referendum on Scottish independence Sir Ian said: “I think everyone’s in the same state of despair about the last couple of years and I’m not going to express my views publicly and I’m not going to comment on another referendum.” He added: “There’s a really good opportunity in fishing. If Brexit happens and we finish up as a coastal state then we will have much more control over fishing. We will over time get a lot more fish for Scottish vessels.”

In 2016 Sir Ian said Nicola Sturgeon should not call a second independence referendum noting if Scotland could join the EU as a member state in its own right it might enjoy little influence in Brussels.

Source: en.brinkwire.com

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