Five key findings from the decommissioning industry questionnaire
The art of ‘collaboration’ in the oil and gas industry has long been touted as a way of sharing expertise, reducing costs and increasing profitability. Only last year, global professional services company Deloitte published a report stating:
“A lack of effective supply chain collaboration means companies are missing out on maximising the potential value from the UK Continental Shelf. 74% of respondents said collaboration was an integral part of their day-to-day business.”
The respondents of the Decommissioning Industry Questionnaire agreed. 72% stated “working collaboratively with other operators” was key to reducing the costs of well abandonment in particular. Other factors that respondents believed would reduce well abandonment costs included, “Improvements in rigless technology” and “New downhole technology”.
2. TALENT SHORTAGE SET TO BITE
Respondents used the questionnaire to share their concerns about the future talent shortage in the industry – a problem that has been talked about for a long time. 46.51% agreed that there isn’t a sustainable skills pipeline currently in place.
While the majority (44.18%) believed that the current industry talent was sufficient, longer term, companies are starting to be concerned about the lack of new personnel. In a panel discussion held by the University of Houston Energy last year, Director for Skills for America’s Future John Colborn said, “The industry is telling us they’re not finding the skills they need. Higher education institutions need to think about how they can better conceptualize material into real-world applications that students can use in the world of work.”
3. DECOMMISSIONING INDUSTRY TO OUTGROW OIL AND GAS
Despite the low oil prices at the time of completing the questionnaire, respondents still believed that the decommissioning industry is to grow over the next five years. With the North Sea alone seeing a considerable amount of activity throughout this decade, it’s clear to see why 85.71% of respondents believe that the decommissioning industry will see growth.
Despite the majority of respondents believing that the oil and gas industry will see growth over the next five years (52.38%), it is clear to see that the majority believe the decommissioning industry will grow at a greater rate than the rest of the oil and gas industry.
4. OIL PRICES EXPECTED TO REMAIN
As anticipated, when asked how oil prices were affecting the decommissioning industry, it wasn’t a surprise to see the majority of respondents (40.91%) say that they were hindering the industry.
A larger proportion of respondents (65.91%) also believed that the oil price, which dipped below $50 a barrel in 2015 for the first time in six years, would remain the same over the next 12 months. The questionnaire also asked respondents on how the costs of the five key decommissioning activities would fluctuate in the next 12 months. To read the results, download your free copy of the Claxton Decommissioning Industry Questionnaire Report, here.
5. CONFIDENCE IN DECOMMISSIONING IS INCREASING
While the oil prices will always affect the confidence of the oil and gas industry, respondents were quick to point towards the buoyancy of the decommissioning industry. 71.43% either agreed or strongly agreed with the statement “I’m confident about the future for my business in the decommissioning industry”.
Respondents ranked the North Sea, UK & Norway as the region with the biggest opportunity for the decommissioning industry (58.9%). The Gulf of Mexico/USA (23.1%) and Asia (7.7%) were ranked second and third respectively.
DOWNLOAD YOUR FREE COPY OF THE REPORT
The Claxton Decommissioning Industry Questionnaire Report is now available to download for free. Featuring all the statistics, findings and opinions from the questionnaire, discover what else industry experts flagged as key opportunities and challenges in 2016 and beyond. Download the Industry Report today.
Claxton's Decommissioning Industry Questionnaire Report
To monitor the industry and find out the opinions of experts in the field, Claxton conducted a market survey in late 2015 and now the results are available here.