Friday 6 August 1999

Capacity Audience for Oil Major’s Vision of UKCS Future at UKOOA Energy Breakfast

A capacity audience of 240 people turned out for the UKOOA Energy Breakfast in Aberdeen today (5 August 1999) to hear Alan Jones, Regional President Scotland, BP Amoco, set out his view of the long term future for the UK oil and gas industry.

The key points of Mr Jones presentation were:

The global competitive environment frames the key challenges and benchmark for the UK upstream industry.

BP Amocos global upstream performance targets illustrate key aspects of this challenge. These include:

* investment for long term growth in oil and gas production - up to 8% a year by the end of the next decade

* focus on finding and developing low cost/high volume resources

* drive to reduce finding, developing and development costs

* business sustainable at bottom of oil price cycle - $11 per barrel

BP Amocos strategy for the UK Continental Shelf (UKCS) is to find ways of sustaining the business here and winning investment funding against fierce competition from other global portfolio options.

Overall in the UKCS, BP Amoco intends to invest between $650m and $750m every year over the next 10 years to sustain production for the long term, provided it can generate new investment opportunities which can compete globally.

BP Amoco strategy to make that happen is based on a strategy labelled Creating OUR Future and has the core elements of:

* Results through productivity improvements - with a focus on operational excellence, efficiency and a new contractor strategy

* Renewal through technology - focusing on low cost drilling, infield growth, infrastructure-led exploration, and tie-backs

* Restructuring - to achieve the scale benefits of our UKCS business, increasing importance of gas in the portfolio mix and initiatives developed by the governments Oil and Gas Industry task Force

Alan Jones welcomed government action on licensing and rollover relief for CGT and urged everyone in the industry to become engaged with the task force agenda. He finished with a positive view of the industrys long term future in the UKCS, provided it can compete at a global level.

 

UKOOA Energy Breakfasts are organised by the UK Offshore Operators Association to provide a regular forum for businesses in the North East of Scotland to exchange views on issues facing the UKCS. They are held every two months, each with a keynote speaker drawn from the offshore industry. Past speakers have been Bob Connon, President of UKOOA and Managing Director of Chevron UK, and Norman Chambers, President of Halliburton Energy Development.

The subject of the next UKOOA Energy Breakfast, to be held in November, will be the results and proposals arising from the Government and Oil and Gas Industry Task Force.

For more information, please call 020 7802 2400.