With investment in the North Sea hitting a 30-year high it’s easy to forget the recent uncertainty surrounding the future of the region’s energy industry.
Only weeks ago I attended a business breakfast with some of my colleagues, where industry leaders fondly highlighted recent successes and confidently forecasted an imminent surge in production.
It was difficult not to be swept along on the wave of optimism that has wiped out suggestions that the province was on its last legs. After decades of production, arguments had been made, quite publically, that the end was nigh. To some, all that was left was for operators to pack up their gear and return to shore.
The future, it seemed, was uncertain. Online and in newspapers conflicting headlines would appear on an almost daily basis as industry forecasters scrambled to have their own predictions heard.
But sitting at breakfast that frosty February morning, surrounded by some of the industry’s biggest and most influential companies, it was difficult to see why there was ever any doubt that the North Sea could continue to deliver vast riches to the UK economy.
Tax incentives for operators of brown fields are being heralded as the driving force behind the industry’s resurgence. And the Government’s support has certainly produced results, providing the fuel to accelerate major investment in the region, both from UK firms and global corporations alike.
And only last week the confidence surrounding the energy sector began to swell further as the Government announced incentives for decommissioning and the emerging shale gas market.
Of course, challenges remain if the industry is to achieve its ambitious targets.
But with the whole sector engulfed in a plume of optimism there seems more determination than ever to work collaboratively to tackle the testing issues which threaten to stifle progress.
The ongoing helicopter situation, for example, has eaten away at the efficiency of operators producing oil and gas in the region, but is now being tackled head on through the creation of two working groups – the Helicopter Safety Steering Group and the Marine Transfer Workgroup.
Industry leaders have been buoyed by the recent upturn in investment and activity, and are constantly evaluating how best to tackle the issue of skills shortages, which was recently highlighted as being the biggest threat to the energy sector in a survey conducted by Oilcareers.com.
But even in discussing these very real challenges there is an undercurrent of excitement and optimism about the future of the energy sector, and that has been clearly reflected in the recent investment in the region.
The Government’s continued support in maintaining the tax regime which helped kickstart the region’s ailing production is welcome.
Further backing from Westminster had been promised, and is being delivered, following the announcement that decommissioning is an area that will soon become subject to similar tax breaks for operators.
In recent years the North Sea energy industry has been something of a sleeping giant as production slowed and investment dried up, but the recent backing of the UK Government has awoken the beast and looks set to drive forward production for many years to come.