Europe’s maturing oil fields may need to rely on technology over talent

Paul Boughton
The reignited interest in the North Sea has led both the UK and Norway to be listed in the top six regions most favourable for global investment, according to research findings released by GL Noble Denton.

In order to realise the full potential of these mature reserves, innovations such as the use of real-time computer technology to re-image the seismic model around a well during drilling, will need continued support, investment and expertise. 44 per cent of European respondents expect capital expenditure on research and development (R&D) to increase this year, above the global average of 37 per cent.
 
Despite these positive signs, the research also highlights an impending skills crisis facing European operators. An older base demographic and a lack of qualified professionals entering the industry will mean that skills shortages will be an acute worry in 2013. The issue is now seen as the number one barrier to oil and gas industry growth, and was cited by 58 per cent of European respondents a major concern.[Page Break]
 
Gas is also expected to play a growing role in a downstream revival, according to the research, with 34 per cent of local respondents expecting European governments to prioritise gas investment in 2013. This far outstrips the perceived priority being given to wind (26 per cent) and oil (19 per cent) infrastructure respectively. The resulting investment in gas projects, such as the North Stream subsea gas pipeline between Russia and Germany, could also lead to cheaper wholesale gas prices by the end of 2013, according to 42 per cent of European respondents.
 
Lutz Wittenberg, GL Noble Denton’s Executive Vice President for Europe, said: “Two of the top six global investment destinations for 2013 are in Western Europe, and this is a pleasing result of renewed interest in the North Sea. Technological innovation has meant that certain mature fields are becoming viable investments once again, and regional R&D outlay looks set to increase accordingly.[Page Break]
 
“Despite this innovation, there is a desperate concern that there simply isn’t enough available talent in Europe to be able to fully realise this inward investment. Technology can go some way to plugging the gap, but if this skills crisis continues, it may damage the North Sea’s long term viability on the global stage.
 
“The resumption of shale gas extraction in the UK this year will also be an interesting development within the European market. There are significant safety and perception concerns to be overcome, but the scale of the available assets could significantly outweigh the risks if the technology is correctly implemented.”  

Seismic Shifts: The Outlook for the Oil and Gas Industry in 2013 is the third in a series of annual industry benchmarks commissioned by GL Noble Denton. 428 senior professionals and executives across the global oil and gas sector were surveyed by GL Noble Denton during November and December 2012 and the research was conducted in association with Longitude Research. [Page Break]
 
63 per cent of respondents operate in both oil and gas, while the rest focus primarily on either oil or gas. The companies surveyed spanned a range of sizes: 28 per cent had annual revenues of US$500m or less, while 19 per cent had revenues in excess of US$10bn. Most respondents’ companies (46 per cent) are publicly listed, with the rest either privately-held (36 per cent), state-owned (12 per cent) or operating as a joint venture.

Respondents represent a range of functions within the industry, with nearly four in 10 (37 per cent) at a director level or higher.
 
For more information, visit www.gl-nobledenton.com

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