• STV
  • MySTV

Oil and gas industry 'must transform within two years'

PwC warned of a 'rapid and premature decline' if a blueprint was not agreed.

Oil: PwC carried out the research. (file pic)
Oil: PwC carried out the research. (file pic) © HEMEDIA / SWNS Group

The North Sea oil and gas industry must transform within the next two years to avoid "rapid and premature decline", a new report has said.

Industry and government must come together to agree a "blueprint for action", taking lessons from countries such as Norway and Saudi Arabia, the PwC research found.

The report is based on interviews with more than 30 senior figures in the industry from the UK, Norway and the Netherlands.

It comes as industry body Oil and Gas UK warned of up to 120,000 job losses in the next two years following the plunge in oil prices.

Despite the bleak outlook, the industry interviews revealed "significant levels of optimism" that, with the right strategy, the North Sea can continue to provide a few more decades of production.

Alison Baker, of PwC, said: "During our interviews we picked up a real sense of urgency to create one last cycle of success that will retain and generate jobs, stimulate growth and ensure security of energy supply.

"But this was matched by a level of frustration at the fundamental issues that need tackling to avert the risk of rapid and premature decline."

The report - entitled A Sea Change - found 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".

Ms Baker added: "This must incorporate onshore activity as well as defining how the North Sea basin will evolve in the short to medium-term and, crucially, how the end game - and subsequent transition to a low carbon landscape - will be managed."

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.

"It's vital that governments and industry come together and agree a blueprint for action.

"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.

"Government and industry have started to come together but this can be built on for the future."

Economy secretary Keith Brown said: "This report supports our firm view that the North Sea continues to represent a huge opportunity for Scotland, with many billions of barrels of oil reserves still to be recovered, and it is heartening that this optimism is shared by industry leaders.

"While we are doing everything within our current powers to support the sector, the UK Government retains control of the main economic levers affecting the industry, including power over the fiscal regime and incentives to invest in exploration.

"It is clear that further support is likely to be required to ensure the industry's success over the longer term.

"That is why we continue to press the UK Government to provide support for exploration and enhanced oil recovery and to act quickly to deliver on its commitment to use the UK Loan Guarantees Scheme to secure new investment in oil and gas infrastructure."

WWF Scotland director Lang Banks said: "Our economy will continue to rely on oil and gas for some time to come, but PwC are absolutely right to highlight the need to prepare for the inevitable transition to a zero carbon future. 

"The climate science is clear that the vast majority of known fossil fuels need to remain in the ground and not burned. 

"We need ministers to support a just transition that enables us to harness the engineering skills currently deployed in the oil and gas industry and apply them to supporting a range of cleaner forms of energy production."

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
ShowHide
Forgot password?
This field is required. This must be at least 6 characters long. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This must be at least 6 characters long.
ShowHide
This field is required. This must be at least 6 characters long.
You must be over 16 to join STV.
This field is required. This doesn't appear to be a valid date
We need this to check that you live in an STV region.
This field is required. This doesn't appear to be a valid postcode
Would you like us to email you about our great shows and services from time to time?
We'll only send emails we think you'll like (see example) based on information you have supplied and shows you have watched on STV Player. For details on emails and advertising, see our STV & You page.
Would you like to receive emails from the Scottish Children's Lottery about draws, instant games and competitions?
We support the Scottish Children's Lottery (SCL), which is managed by our colleagues at STV ELM Ltd. You can find out more about the SCL on its website, including its Privacy Policy.

By continuing you agree to our Terms of Use, and understand our Privacy and Cookie Policies.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.

Thanks

We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.

Oops!

Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.

Oops!

Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.

http://shows.stv.tv/real-heroes/voting

Oops!

Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.