ADIL Managing Director James Paton chaired a keynote session titled ‘The Independent Oil Company – mighty oaks from little acorns grow’ at Offshore Europe 2013.
A distinguished line up of speakers included Tony Hayward – CEO Genel Energy, Simon Flowers – Head of Corporate Research at Wood Mackenzie, Tom Reynolds – CEO Bridge Energy, Simon Toole – Head of Exploration Licensing & Development DECC, Graham Stewart – CEO Faroe Petroleum and Dr Marcus Richards, Group Chief Executive Dana Petroleum.
During the session James addressed the issue of restricted access to funding that severely impedes the activities of independent oil companies, hindering the important role they play in stimulating exploration activity and allowing the industry to continually grow.
James said: “The role of independent oil companies is a topic that I not only have an interest in – it’s something that I’m very passionate about. For me, independent oil companies are the lifeblood of our industry, playing a vital role in stimulating regional exploration activity and maximising exploitation of mature regions.
“I actually believe this has always been the case but has become more pronounced as the big oil companies have been distracted by integration activities and less focused on exploration.
“The independents’ ability to explore new global frontiers adds opportunities while their activity in mature basins expands the reserve base, allowing the industry to continually grow and evolve.
“As such they have been more successful than the majors in producing these smaller, stranded, geologically complex or end of life fields through their focused use of novel technology and innovative solutions.
“However, I believe that the vital role these companies play in stimulating exploration activity and adding value to mature basins is under threat due to the lack of available funding. In the UKCS this is compounded by an ever increasing cost base and an increased requirement for financial security measures.
“In ten years’ time, when we reflect on our industries performance, how much of the reported 15-24million boe remaining reserves in the North Sea will have been produced, or have credible plans to be produced, and how much will be stranded? I think if we carry on as we are we will be disappointed at our performance.
“The independent oil companies will be at the heart of what happens here, with considerable influence on the outcome. As always, I think we should look at what we as industry can do to improve the situation.
“One way would be to improve the way oil companies work together. By collaborating, independents can benefit by having the same economies of scale as major companies whilst still maintaining their flexible and entrepreneurial approach.
“In the case of small, stranded assets value can be greatly increased through the use of shared infrastructure, which dramatically reduces the costs associated with each field. This approach could undoubtedly be extended to exploration and appraisal activity as well.”
“I believe the independent oil companies are essential to our industry, particularly in exploring new untapped regions providing the opportunity funnel big oil relies on and in deriving maximum value in mature basins, providing maximum benefit to the region.”