Has the referendum vote stunted jobs?
Discussion
Now I don't want this to be anything like a political stomping ground trying to sway people's views.
Has anyone else noticed a slow down of jobs in the oil and gas industry in Aberdeen the past few weeks/months?
I started looking properly in September/October last year and there was several Health and Safety jobs every day. Recently however there's been very few advertised.
Now either a new job site I don't know off has come up (unlikely), it's a slow time due to holidays etc or companies are holding back recruitment until they see what happens with the referendum vote!
Anyone else noticed the same or know what could be different?
Has anyone else noticed a slow down of jobs in the oil and gas industry in Aberdeen the past few weeks/months?
I started looking properly in September/October last year and there was several Health and Safety jobs every day. Recently however there's been very few advertised.
Now either a new job site I don't know off has come up (unlikely), it's a slow time due to holidays etc or companies are holding back recruitment until they see what happens with the referendum vote!
Anyone else noticed the same or know what could be different?
The industry seems to have died a death. The independence referendum can't be helping but I don't think it's entirely to blame as the market has slowed a lot in Norway also.
A few years ago companies stopped exploring in the UKCS and NCS - possibly because both are heavily taxed and the reserves themselves are getting increasingly expensive to extract (in terms of infrastructure). Remaining reserves are increasingly fragmented and hostile requiring ever more expensive infrastructure to produce smaller and smaller fields. I think what we're seeing in the UK and in Norway is the results of the lack of interest in these areas when other parts of the worlds offer far better returns on investment.
I work in front end developments. There is very little happening at the moment. Only the biggest untapped discoveries are being investigated in terms of engineering and feasibility/viability.
Decommissioning costs have almost every owner/operator and of course the government very uneasy because the income has virtually dried up and whilst the mechanisms always existed to set aside money to pay for decommissioning, this is an area which has demonstrated itself to be seriously underestimated. On average, decommissioning costs 3 times any expected cost. This seems to be where greatest owner/operator interest lies (based upon the volume of tenders we turn over for decommissioning study work as opposed to development work) to try to get a better grip on what the real costs are likely to be - but we've already given some very bad news to some clients on that subject matter which ruins their financial outlook somewhat.
For existing assets, they have larger maintenance backlogs than ever but production rates continue to decline due to the very mature fields trickling away at minimal pressures and poor reliability/availability. The industry is cutting rates and shedding personnel in an effort to reduce operating costs. Aberdeen in particular is not buzzing at the moment.
The independence referendum just provides a bad overtone for an existing problem, which I believe can only be resolved by easing of tax burdens. Oil is still a valuable commodity, but I don't think the wider public really grasps just how uninterested any operators are in investing in the UKCS these days.
At the moment, the industry really appears to be on the wind-down overall.
A few years ago companies stopped exploring in the UKCS and NCS - possibly because both are heavily taxed and the reserves themselves are getting increasingly expensive to extract (in terms of infrastructure). Remaining reserves are increasingly fragmented and hostile requiring ever more expensive infrastructure to produce smaller and smaller fields. I think what we're seeing in the UK and in Norway is the results of the lack of interest in these areas when other parts of the worlds offer far better returns on investment.
I work in front end developments. There is very little happening at the moment. Only the biggest untapped discoveries are being investigated in terms of engineering and feasibility/viability.
Decommissioning costs have almost every owner/operator and of course the government very uneasy because the income has virtually dried up and whilst the mechanisms always existed to set aside money to pay for decommissioning, this is an area which has demonstrated itself to be seriously underestimated. On average, decommissioning costs 3 times any expected cost. This seems to be where greatest owner/operator interest lies (based upon the volume of tenders we turn over for decommissioning study work as opposed to development work) to try to get a better grip on what the real costs are likely to be - but we've already given some very bad news to some clients on that subject matter which ruins their financial outlook somewhat.
For existing assets, they have larger maintenance backlogs than ever but production rates continue to decline due to the very mature fields trickling away at minimal pressures and poor reliability/availability. The industry is cutting rates and shedding personnel in an effort to reduce operating costs. Aberdeen in particular is not buzzing at the moment.
The independence referendum just provides a bad overtone for an existing problem, which I believe can only be resolved by easing of tax burdens. Oil is still a valuable commodity, but I don't think the wider public really grasps just how uninterested any operators are in investing in the UKCS these days.
At the moment, the industry really appears to be on the wind-down overall.
Plenty of jobs on offer at the moment with most companies I know. Mostly on the manufacturing side.
Health and Safety seems to be getting too popular at the moment. Too many people trying to transfer their skills over from other professions to get into oil and gas.
A lot end up aiming at health and safety.
Health and Safety seems to be getting too popular at the moment. Too many people trying to transfer their skills over from other professions to get into oil and gas.
A lot end up aiming at health and safety.
Certainly a 'mend and make do' attitude in recent months from my employer. What used to be a steady stream of investment to upgrade and replace worn out kit has stopped. No recruitment to speak of either. Austerity may be partly to blame but that's not the feeling of the staff. But then my sector faces what would amount to a takeover in the event of a YES, so maybe it is not surprising. I just hope things return to normal after the vote.
jamieduff1981 said:
A few years ago companies stopped exploring in the UKCS and NCS ...
Incorrect.jamieduff1981 said:
Only the biggest untapped discoveries are being investigated in terms of engineering and feasibility/viability.
Plenty concept and FEED work on the go for; single well tie-backs, brown field bits and pieces, life extension programmes and field redevelopment.jamieduff1981 said:
On average, decommissioning costs 3 times any expected cost.
This is incosistent with my findings from a handful of deterministic decommissioning estimate validations I've done in the last few years. Most were there or thereabouts - even running big ticket sensitivities for vessel and rig market.Edited by Kiltie on Tuesday 26th August 13:39
Kiltie said:
jamieduff1981 said:
A few years ago companies stopped exploring in the UKCS and NCS ...
Incorrect.jamieduff1981 said:
Only the biggest untapped discoveries are being investigated in terms of engineering and feasibility/viability.
Plenty concept and FEED work on the go for; single well tie-backs, brown field bits and pieces, life extension programmes and field redevelopment.jamieduff1981 said:
On average, decommissioning costs 3 times any expected cost.
This is incosistent with my findings from a handful of deterministic decommissioning estimate validations I've done in the last few years. Most were there or thereabouts - even running big ticket sensitivities for vessel and rig market.Edited by Kiltie on Tuesday 26th August 13:39
We're just not seeing it (the tie-backs and redevelopments). Our major competitors are quiet too.
Especially curious about decommissioning, as your statement contradicts all benchmarking data and themes of practically all of the major forums and working groups.
Edited by jamieduff1981 on Tuesday 26th August 15:18
Kiltie said:
jamieduff1981 said:
... all benchmarking data and themes of practically all of the major forums and working groups.
What are these?If your organisation is awash with front end work and the decom estimates you're validating have been carried out by somewhere that knows what they're doing then great - you're clearly very successful and a lot of work is passing through your business. We're quiet though. I may have been a bit strong saying "dead", but it's definately slowed down a lot over the last few years.
If you're actively involved in decommissioning consultancy I'd be delighted to meet up for a beer sometime and learn from you
I thought Performance Forum just reported project outturn. I'll have a look today and see I can spot any reference to your claim that actuals are averaging three times budgets.
To be clear, my organisation isn't "awash" with decommissioning work. I don't see where you picked that up from. All our current work in the UK is related to developmemt and asset integrity.
I've sat through a lot of hours of people speaking at decommissioning conferences. Sometimes I zone out but I'm sure I'd have remembered if someone had told me that decommissioning budgets / estimates are averaging a third of actual or projected.
To be clear, my organisation isn't "awash" with decommissioning work. I don't see where you picked that up from. All our current work in the UK is related to developmemt and asset integrity.
I've sat through a lot of hours of people speaking at decommissioning conferences. Sometimes I zone out but I'm sure I'd have remembered if someone had told me that decommissioning budgets / estimates are averaging a third of actual or projected.
I was at a conference in November organised by Decomworld where some speaker had that up on screen.
I maybe painted an overly negative image of our industry in my post. It's going ok. If anything things became a bit wasteful over the past few years with some non-jobs created, and some places are re-evaluating things a bit. I think a lot of the NCS slow down has been due to Statoil's change in tack of project economics criteria after a period of fairly unpredictable project performance.
Maybe I'm over sensitive too as a lot of our work recently has been with clients who haven't had the best financial performance recently for a variety of reasons.
Not trying to be contrary or argumentative - just expressing a viewpoint
I maybe painted an overly negative image of our industry in my post. It's going ok. If anything things became a bit wasteful over the past few years with some non-jobs created, and some places are re-evaluating things a bit. I think a lot of the NCS slow down has been due to Statoil's change in tack of project economics criteria after a period of fairly unpredictable project performance.
Maybe I'm over sensitive too as a lot of our work recently has been with clients who haven't had the best financial performance recently for a variety of reasons.
Not trying to be contrary or argumentative - just expressing a viewpoint
Seeing as the latest postings seem quite friendly, are full of smiley faces and people aren't telling each other to f
k off can I ask a question to the No voters.
Putting aside all the economic arguments for / against independence, why do the No voters think Alex Salmond want's independence so badly if he know's that he is effectively signing off on Scotland's downfall? If it's a Yes vote and the economy goes bust and we're out of Nato / The EU as a pariah state, Salmond would most likely go down as the most reviled person in Scottish history? Do people really think his ego or stubborness is that great that he want's independence and doesn't give a hoot?
It's because of this that I think there has to have been discussions on currency, EU membership, Nato membership etc, surely to god he can't be willing to risk it all just to say he was the man that got independence?
k off can I ask a question to the No voters.Putting aside all the economic arguments for / against independence, why do the No voters think Alex Salmond want's independence so badly if he know's that he is effectively signing off on Scotland's downfall? If it's a Yes vote and the economy goes bust and we're out of Nato / The EU as a pariah state, Salmond would most likely go down as the most reviled person in Scottish history? Do people really think his ego or stubborness is that great that he want's independence and doesn't give a hoot?
It's because of this that I think there has to have been discussions on currency, EU membership, Nato membership etc, surely to god he can't be willing to risk it all just to say he was the man that got independence?
In my personal view Salmond has always (for as long as I can remember him) been very vocal about independance but never, ever spoke about life post independance.
Now the referendum is approaching I don't believe his argument has moved forward.
He always struck me as one of the characters from that Steve Martin, Martin Short & Chevy Chase film "The 3 Amigos" where they end up mid-rescue and someone asks "Now what?" and an Amigo replies something along the lines of "Well we didn't really think the first part of the plan would work so we didn't think beyond that".
So to answer your question directly, in my personal opinion only, I believe Alex Salmond is singularly concerned with being the man who made Scotland an independant country.
Now the referendum is approaching I don't believe his argument has moved forward.
He always struck me as one of the characters from that Steve Martin, Martin Short & Chevy Chase film "The 3 Amigos" where they end up mid-rescue and someone asks "Now what?" and an Amigo replies something along the lines of "Well we didn't really think the first part of the plan would work so we didn't think beyond that".
So to answer your question directly, in my personal opinion only, I believe Alex Salmond is singularly concerned with being the man who made Scotland an independant country.
Kiltie said:
jamieduff1981 said:
I was at a conference in November organised by Decomworld where some speaker had that up on screen.
Who?May I ask if you're having a particular pop at me or whether you're always this curt?
Its not directly correlated (as far as I know), but the organisation / company I work for in Aberdeen has very recently decided to can its offshore renewables division, as the short-medium term outlook for the offshore wind / renewables industry is not moving forward much at this stage.
Usual issues of construction costs against the ultimate sale price for electricty continue to make them significant loss leaders without the support and minimum energy pricing subsidy that governments offer. I'm fairly sure its on the mind of developers that they are unsure of the subsidy levels in the future, hence will not make investment decisions until we make a decision.
Its a side point, but I keep saying to people that the renewables "potential" will likely not happen on any significant scale unless an independant Scotland could come to some form of subsidy agreement with rUK. Without that, the potential will remain untapped, as a small country could not support investment and subsidy levels on such a scale.
jamieduff1981 said:
Kiltie said:
jamieduff1981 said:
I was at a conference in November organised by Decomworld where some speaker had that up on screen.
Who?May I ask if you're having a particular pop at me or whether you're always this curt?
I'm struggling to imagine someone making a general statement on a presentation slide in relation to NS decommissioning projects which said ...
jamieduff1981 said:
On average, decommissioning costs 3 times any expected cost.
I'm happy to be corrected so if you have the conference proceedings, I'd be grateful if you could check back.Kiltie said:
jamieduff1981 said:
Kiltie said:
jamieduff1981 said:
I was at a conference in November organised by Decomworld where some speaker had that up on screen.
Who?May I ask if you're having a particular pop at me or whether you're always this curt?
I'm struggling to imagine someone making a general statement on a presentation slide in relation to NS decommissioning projects which said ...
jamieduff1981 said:
On average, decommissioning costs 3 times any expected cost.
I'm happy to be corrected so if you have the conference proceedings, I'd be grateful if you could check back.I'm sure we paid for the material so I'll have it somewhere. "3 times any expected cost" is not really what I meant. What I was trying to express is that a weight of evidence of topsides and jacket removal out-turn costs has exceeded target cost estimates for major contract values and indeed exceeded budgets set aside by budget holders for it. There was a wide scatter but it averaged out at around 3 times the expected prices for tonnage removed to date - of which the organisation I'm working with at present has removed around half of in the North Sea so far, and admittedly has had its fingers burned on one particular lump-sum decommissioning contract. Lessons learned though...
I don't mean to imply incompetence in the local workforce by the way, and we have an ongoing decommissioning contract in execution phase at present which is going well.
My particular concern with decommissioning costs on a national scale is with a substantial number of very poor quality cost estimates held by a number of operators which spectacularly fail the validation tests. Of course there are some which can be rubber stamped and carried forward.
One recent example I was personally involved with resulted in our client adjusting their figures for marine costs by a factor of 5. The previous organisation made no provision for accommodation after the topsides were uninhabitable, made no allowance for HLV holding time whilst seafastening or setting up for lifts and it even went as far as to only include for a single seagoing tug to pull a barge whereas it's more normally done with 3 tugs - 2 at the front and 1 at the back so they can stop and turn the barge. There was nothing really wrong with any of the estimating norms used time-wise and the rates had been maintained over time. The underlying assumptions upon which the cost estimate they held though were frankly mince and simply did not stand up to challenge.
I think decommissioning is a market where many people can find gainful employment for the future and I also reckon that the £30bn figures suggested recently for the value of decommissioning work probably seems reasonable once well abandonment etc is factored in. Who knows what will happen with pipelines etc - my guess is that many will be cleaned and left? You'll know that area better than I though - I'm a topsides chap.
gofasterrosssco said:
Its not directly correlated (as far as I know), but the organisation / company I work for in Aberdeen has very recently decided to can its offshore renewables division, as the short-medium term outlook for the offshore wind / renewables industry is not moving forward much at this stage.
Usual issues of construction costs against the ultimate sale price for electricty continue to make them significant loss leaders without the support and minimum energy pricing subsidy that governments offer. I'm fairly sure its on the mind of developers that they are unsure of the subsidy levels in the future, hence will not make investment decisions until we make a decision.
Its a side point, but I keep saying to people that the renewables "potential" will likely not happen on any significant scale unless an independant Scotland could come to some form of subsidy agreement with rUK. Without that, the potential will remain untapped, as a small country could not support investment and subsidy levels on such a scale.
Never mind iScotia, the whole UK can't afford to sustain the current subsidy offer much longer, it's absurd and ruinous. If we're going to use bill payers to subsidise and underwrite construction of generating plant I want the words 'fission' and 'base load' involved at some point.Usual issues of construction costs against the ultimate sale price for electricty continue to make them significant loss leaders without the support and minimum energy pricing subsidy that governments offer. I'm fairly sure its on the mind of developers that they are unsure of the subsidy levels in the future, hence will not make investment decisions until we make a decision.
Its a side point, but I keep saying to people that the renewables "potential" will likely not happen on any significant scale unless an independant Scotland could come to some form of subsidy agreement with rUK. Without that, the potential will remain untapped, as a small country could not support investment and subsidy levels on such a scale.
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