THE North Sea basin has a two year window in which to safeguard its future for the next two decades, or risk “decline at an exponential rate” according to a new PwC report.
The report, A Sea Change, says that a robust roadmap is needed to transform the basin, meet short-term energy needs and bridge the gap to a lower carbon future. This will require drive and direction from government and the Oil and Gas Authority (OGA).
“The majority of respondents want government to take a lesson from Norway and Saudi Arabia and be bold in setting out their blueprint for the future,” said Alison Baker, PwC’s UK and EMEA oil and gas leader.
Radical measures that could reinvigorate the basin include creating a super joint venture vehicle that consolidates smaller assets under one sole operator. This investment vehicle could drive cost-efficiencies, boost bargaining power, and enable a more co-ordinated approach to decommissioning.
PwC adds that a change of guard at the top is essential if the industry is to change its mentality. Historically, large operators have exported their best talent to frontier basins, leaving solid and stable leaders to man the helm across mature assets. But this has stifled innovation.
Kevin Reynard, PwC Office Senior Partner in Aberdeen, said: “The North Sea still has a strong couple of decades ahead of it but the decisions to sustain it in that period need to be taken quickly.”
No one company standing alone can weather this but if all interested parties join forces to address the issues then there is hope for the North Sea.”
The PwC interviewees showed significant levels of optimism that with the right leadership, innovative strategies, intervention and co-operation, the North Sea can continue to provide a few more decades of production.