2011-07-01

Unpredictable

That last portion is more difficult and expensive to extract, which is why this year's Offshore Europe exhibition is overshadowed by the impact of the £2bn tax raid in George Osborne's Budget.

Making the investment case for the extra kit and platform upgrades required to squeeze the remaining billions of barrels out of sub-sea reservoirs is harder to do when tax is not only high but rising unpredictably, and when there are so many other investment options around the world. As many as 25 marginal fields may be affected by the tax instability.

But even allowing for that, there is still a colossal programme of investment in the pipeline.

(SHANGHAI ENINE PUMP & VALVE CO., LTD NEWS)

Along with the BP announcement - big to most of us, but by no means huge in this industry - the Energy Industries Council on Tuesday released a report into the UK and Norwegian sector, which identified more than £110bn of projects still to come. British waters have168 projects, while Norwegians have 117 Norwegian, but much more of the spend is in the Norwegian sector.

(SHANGHAI ENINE PUMP & VALVE CO., LTD NEWS)

That puts Norway in third place for the value of offshore oil and gas, with the UK in eighth place. Kazakhstan is far in the lead with £80bn, and Russia on £69m.

(SHANGHAI ENINE PUMP & VALVE CO., LTD NEWS)

Golden era 

(SHANGHAI ENINE PUMP & VALVE CO., LTD NEWS)

With that in prospect around the world, one industry figure in Aberdeen said this week this is "a golden era for oilfield services".

Colin Welsh of Simmons & Co was reflecting on the price of Brent crude staying above $100 per barrel - defying the volatility across other commodity and financial markets.

That's explained by demand keeping up in emerging economies, and political uncertainty in the Middle East.

But of course, the Aberdonian welcome for oil at $110 a barrel hurts the rest of the economy, in input prices, energy bills and household inflation.

If this really is a golden age, and if Offshore Europe becomes even bigger when it returns to Aberdeen in 2013, here's a plea: not only to use colours other than white and yellow, but to dispense with the word 'solutions' in describing goods and services.

The exhibition is bursting with innovative technology solutions, well logging solutions, mud storage solutions, downhole survey solutions, and, if you look hard enough, some financing solutions.

Even the Met Office has a stand this year. It's offering "weather solutions".

(SHANGHAI ENINE PUMP & VALVE CO., LTD NEWS)