OPINION: Like a former world champion boxer, the UK North Sea industry has found it impossible to stay away from the ring.
Its glory years may be long gone, but it has continued to make comeback after comeback.
Take how it responded to the dire oil price downturn of 2014 by introducing cost cuts, better ways of working that led to production increases and a leaner and more competitive industry than for many years.
But coming so soon after that battle, the coronavirus pandemic and the 55% decline in oil prices since the start of the year to about $28 this week are body blows from which the ageing sector may find it hard to recover.
Trade body Oil & Gas UK (OGUK) this week sounded grim warnings.
OGUK’s market intelligence manager Ross Dornan warned — as the association launched its annual flagship business outlook report — to expect “delays, deferrals and, in some cases, even cancellations” of work and projects.
Capital investment could now be 20% or 30% lower this year than last at £4 billion to £4.5 billion ($4.72 billion to $5.3 billion).
OGUK said it has “significant concerns” about the resilience of the supply chain, especially, to absorb further pressure.
No doubt the North Sea will continue to put up a fight and there are still glimmers of hope. Take the announcement this week by Total of its new Isabella discovery.
One is left wondering, however, just how many more times the industry can get up off the canvas and how many more economic punches it can take.
(This is an Upstream opinion article.)