Collaboration key to North Sea recovery

North Sea oil and gas companies must collaborate more to help the industry cope with the fallout from the coronavirus crisis, specialists have said.

A report by Deloitte and OGUK (Oil and Gas UK) found that collaboration appeared to have increased slightly in the North Sea last year, during which the oil price plunged.

However, the pandemic and consequent economic downturn also led to “disadvantageous commercial behaviours” such as cancelled or modified contracts.

The report's authors appear to believe firms will have to embrace collaboration with greater enthusiasm to help them respond to both the challenges posed by the pandemic and opportunities associated with the transition to a cleaner energy system.

Graham Hollis, senior partner in Deloitte’s Aberdeen office, said: “In what is an extremely challenging environment, the industry must assess new opportunities and challenges as it addresses the year ahead.

“Organisations need to reimagine their businesses and models and focus on the right set of collaborative behaviours because as the report highlights, working closely with suppliers and customers to support one another will be vital.”

Katy Heidenreich, OGUK supply chain and operations director, said: “The ability to work together well across companies, industry and the wider energy sector will be critical to delivering a successful energy transition which supports jobs and the communities we work in. Collaboration needs to be part of our DNA.”

The comments were made ahead of the publication today of the latest edition of the annual Collaboration Index report, which was launched by Deloitte and OGUK amid the last downturn in the North Sea.

It was recognised at the time that ultra- competitive behaviours which became the norm during the preceding boom could hamper recovery efforts.

The Collaboration Index increased to 7.1 last year, from 7 in the preceding year. Ten is the top score.

Read the latest issue of the OGV Energy magazine HERE.