Oil Majors Lose Faith In The North Sea – 100 Shut Downs Looming

Oil Price ^ | 21 April 2016 | Nick Cunningham

[Lorianne]

Oil production from the North Sea posted gains in 2015 for the second year in a row, but the recent uptick in output could be a blip in the region’s long-term decline.

Oil companies added 160,000 barrels per day last year from North Sea projects in the UK and Norway, according to the IEA. However, those gains came from projects that were planned years ago when oil prices traded above $100 per barrel. With Brent crude declining by more than 60 percent from mid-2014, North Sea oil producers have slashed spending, scrapped projects and are looking to sell off assets.

The IEA summed it up in its latest monthly Oil Market Report: “North Sea projects fall victim to oil price slump.”

For example, Det Norske, a Norwegian oil producer, is “shopping cheap assets” and is contemplating scrapping its Vette project, which it purchased from Premier Oil just last year. The project would have seen a floating production and storage offloading unit, but it could soon be killed off. Royal Dutch Shell is also looking to sell off its “old and mature” assets as part of its $30 billion divestment program over the next few years.

Even existing oil fields that are actively producing oil could be shuttered earlier than planned because of low oil prices. Statoil announced recently that it could shut down its Veslefrikk oilfield much earlier than it originally had planned. That follows a previous decision to shut down its Volve field by the end of 2016, several years earlier than anticipated.

Several similar decisions are under consideration from other operators. In another example, Repsol shut its Varg field, a small 5,000 barrel-per-day field, five years earlier than it expected.

[Robert A Cook PE]

The oil companies havr NOT “lost faith” in their North Sea oil fields!

They have been PERSECUTED and BETRAYED by their governments (UK, EU, Canada, and - most importantly - Obola’s US dictatorship) and can no longer make money drilling out there while oil prices are deliberately driven artificially low by Obola’s Saudi and its allies to KILL the European and US oil companies with artificially low prices.

[chit*chat]

The pols want the peons to conserve. Now they have their wish!

[2001convSVT]

All these shut-ins, sell-offs and close-outs are setting the stage for a perfect storm of oil shortages and the inevitable price run-up. The only possible place that could act as a swing producer to bring down prices would be North American shale oil. If not, the world will be at the mercy of Russian and middle east producers.