Newspaper article The Journal (Newcastle, England)

Oil Prices Unlikely to Rise Soon, Warn Experts; OFFSHORE

Newspaper article The Journal (Newcastle, England)

Oil Prices Unlikely to Rise Soon, Warn Experts; OFFSHORE

Article excerpt

Byline: LYNSEY BEWS AND KATRINE BUSSEY business@ncjmedia.co.uk

THE new boss of the UK's oil and gas body has warned that the industry must become sustainable in a world where long-term oil prices are about 60 US dollars (PS38) a barrel.

Deirdre Michie told the annual industry conference in Aberdeen that the sector must learn from its mistakes and be open to change. Global oil prices have dropped sharply in recent months, down more than 40% from last June.

The industry has been hit by job losses while North Sea exploration reached its lowest level in at least two decades in 2014.

Oil tycoon Sir Ian Wood, who carried out a review of the industry for the UK Government, has forecast that the price could stay at about the $65 a barrel level "for possibly quite a long time, maybe two to three years".

Ms Michie, chief executive of Oil and Gas UK, said: "In terms of our economic contribution and value to the country, this industry stands head and shoulders above the rest.

"We have paid more to the Treasury than most other industrial sectors, we generate hundreds of thousands of skilled jobs, we have a vibrant supply chain, at home and abroad, and make a key contribution to the UK's security-of-energy supply.

"It is an industry that has grown and evolved for 50 years. However, we now face real and present threats that are challenging our future.

"While demand for our products remains strong, critical for our transport and heating our homes, and giving us a whole host of everyday products, our productivity as an industry has fallen - and fallen rapidly.

"In relation to our escalating cost base, we know that as an industry we have been part of the problem; now we need to be part of the solution.

"Over the last 20 years, the price has averaged at $62 per barrel and the forward curve is between $65 and $75. …

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