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Shell links North Sea spend to collaboration

The UK-Dutch major stresses an ongoing commitment to its home waters, but with conditions attached

Shell plans to drill 20 wells on the UK continental shelf (UKCS) this year, spending $600mn, Wael Sawan, the firm's upstream director, told the SPE Offshore Europe 2019 conference. "But that commitment comes with strings—we need to work closer together," he warns.

"Companies have moved on from the traditional adversarial relationship that existed [on the UKCS]. But we need to embrace technology more. There needs to be a 'next level' of cooperation," Sawan continues.

And fellow major Total tells a similar story. "If we increase the level of collaboration, we can deploy new technology earlier, delivering new tools to meet the problems that we face," says the firm's CEO Patrick Pouyanne. Despite, like Shell, slimming down certain areas of its North Sea portfolio, Pouyanne says that—not least for its relative political stability compared to Total activity hubs such as Russia, Nigeria and Angola—he "loves the North Sea," before adding "at least for the time being, even with Brexit".

That said, while Total's concentrated ownership in key Central North Sea and West of Shetland assets give it some scale, Pouyanne's description of the firm's global strategic focus—offshore conventional oil in low-cost areas such as the Middle East, giant deepwater projects in west Africa and Brazil, and LNG—is notable in the lack of fit even for its remaining North Sea assets.

More agile

"We need to create arenas where we can share knowledge competency," says Karl Johnny Hersvik, CEO of Aker BP, a joint venture between Norwegian industrial conglomerate Aker and BP, another European major that has rationalised its North Sea holdings.

Currently, only 3-5pc of available data at all stages of exploration and production is being shared by companies, and this is preventing companies from achieving greater efficiency through becoming leaner and more agile, says Hersvik.

"Digitalisation offers this industry its path to the future. We have already overcome the world's toughest problems to get to this point, and now we have the future in our hands. We could apply the same mindset, the same agility and the same functions that modern tech companies do to maximise the utilisation of our resources."

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