A new research and development facility has opened in Aberdeen to help breathe new life into the struggling North Sea oil industry. The Oil and Gas Technology Centre will partly fund the work while also acting as a bridge between small tech firms and the big oil producers.
Oil supply company Mistras has been developing technology more commonly used to enable expectant mothers to see their babies. The ultrasound scanners, complete with cold jelly, are being used to detect corrosion in pipes. The Dyce-based company hopes the technology centre will help them get their product to new customers.
The Oil and Gas Technology centre will invest in small firms with solid ideas and help pair some of those developers with the offshore operators that need them. Chief executive Colette Cohen said: “We have much more operators in the North Sea now, I think it’s about 60 operators whereas back In the 80s it was about five or six, so it is a hugely different world. ‘Those smaller operators don’t have a technology organisation. They’re not big enough and they can’t support that, it wouldn’t be economic. “So this is a time when we can provide that service to them.”
The new centre will build on the existing work being carried out by Aberdeen’s two universities. At Robert Gordon University they have a drilling-rig simulator where they train students and refresh the skills of those in the industry. They will now be able to incorporate new technologies into their models to see if they work effectively.
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Shell has sold a large part of its North Sea oil fields for $3.8bn (£3bn) to a company headed by Linda Cook, who left the Anglo-Dutch group more than seven years ago. She will become chair of private equity-backed oil group Chrysaor after it snapped up the package of oil fields put up for sale by Shell. The deal will be partly funded by Harbour Energy, which is part of the US investment giant EIG and where Cook has been managing director since 2014.
The assets sold by Shell accounted for more than half of the company’s North Sea oil production last year and includes fields gained after Shell acquired gas giant BG Group for £47bn. More than 400 jobs will be transferred to Chrysaor, which will become one of the UK’s biggest oil and gas producers after the sale is completed in the second half of this year.
The deal covers Shell’s interests in the fields Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, and a 10% stake in Schiehallion. Shell also announced on Tuesday that it had sold its stake in a Thai gas field for $900m to a subsidiary of the Kuwait Foreign Petroleum Exploration Company.
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Shell has unveiled a plan to dismantle four enormous oil rigs in the North Sea, kicking off a vast and controversial decommissioning project. The Brent field rigs were built in the 1970s and produced around a tenth of the UK’s North Sea oil. But three of the four ~ Alpha, Bravo and Delta – have now shut down, and this summer the company will embark on a multibillion-pound 8 to 10 year project to remove the vast drilling and accommodation structures.
The plan being submitted to the Department of Business, Energy and Industrial Strategy has been a decade in the making, as the group has consulted community groups, academics, fishermen and environmentalists in an attempt to avoid a repeat of the Brent Spar debacle.
Brent, which started Dumping in 1976, is not the first field to be decommissioned in the North Sea, but it is one of the biggest. And the remote nature of the rigs – more than 100 miles north of Shetland in deep, hostile waters – together with the unusual concrete construction of three of the rigs pose a unique challenge. Hell’s answer is a vast ship currently moored in Rotterdam, which will attempt to lift the entire 24,000-tonne topside of the Delta platform – in one go, possibly as soon as May.
It will be the heaviest ever single lift, and only the second for the Pioneering Spirit vessel after it removed a topside half the weight off Norway last year. To prepare the rig for lift-off around 1,500 people were working last year to reinforce the Delta platform, welding steel to strengthen it, so the topside did not disintegrate when lifted.
Under Shell’s plan, plenty of Brent’s manmade structures will stay in the North Sea. The company is applying for an exemption from international rules that require everything is removed. Since the outcry over Brent Spar, the Ospar treaty has banned the dumping of installations or leaving them wholly or partly in place.
Shell’s argument is that Brent platforms were built in haste and, unlike later rigs, were never designed to be removed. It insists the safest and most environmentally-friendly option is to leave the 300,000-tonne concrete bases beneath three of the platforms, with the concrete legs left to poke out of the water as a navigational aid for fishermen. Oil will also be left in huge storage cells, entombed in metre-thick concrete, as will oil mixed up with broken material on the seabed from when the wells were drilled.
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Oil giant BP saw profits double in the last three months of 2016 on the back of slightly higher oil prices and more cost-cutting. Underlying replacement cost profit – the company’s preferred measure – was $400m, up from $196m a year earlier. BP took another charge of $799m for the Deepwater Horizon disaster, bringing total charges to $62.6bn.
For the year as a whole, underlying replacement cost profit – which strips out fluctuations in the value of oil stocks – fell to $2.58bn (£2.08bn), down from $5.90bn in 2015.
BP said it would balance its books at an oil price of around $60 per barrel by the end of the year. Oil companies have been selling assets and cutting costs to adjust to lower prices. Brent crude, the International benchmark, averaged $44 a barrel last year, the lowest In 12 years. The group has been making acquisitions recently, snapping up Australian petrol stations at the end of last year, striking a deal to take a 10% stake in Abu Dhabi Company – giving it access to the emirate’s largest oilfields, and taking a stake in exploration areas off the coast of Mauritania and Senegal.