NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewables sector, believes that 2017 will prove to be a turning point for the UK oil and gas sector creating opportunities for the supply chain.

With The Organization of the Petroleum Exporting Countries (OPEC) recently agreeing to reduce production, followed by producers such as Russia, the price of oil has lifted to more than $50 per barrel with predictions it will remain above that level.

In addition, operators, such as Hurricane Energy and INEOS, have signalled their intentions to develop production opportunities on the UK Continental Shelf. INEOS acquired its first North Sea gas fields at the end of 2015 and is increasing its focus on the basin, including relocating its headquarters from Switzerland to the UK.

British oil and gas exploration company Hurricane Energy has assets West of the Shetland Isles, including Lancaster, which, following a pilot appraisal, features a 620-metre oil column that could contain an estimated 500 million barrels.

As a result of these developments, NOF Energy believes that the efforts made by the supply chain during the recent downturn perfectly places companies to benefit from an increase in activity.

The downturn became one of the catalysts for transformational change within the UK oil and gas sector to improve efficiencies, productivity and control costs. Through increased collaborative working and the development of innovative, technology-led solutions, the supply chain has helped the industry reduce operating costs by 45 percent from $29 to $16 per barrel.

George Rafferty, Chief Executive of NOF Energy, said: “2017 should bring a period of stability for the North Sea, which will lead to an improved picture and the emergence of new prospects later in the year. The low oil price has driven some much needed transformational change within the industry and it’s also presented opportunities for some of the more entrepreneurial businesses across the supply chain.

“NOF Energy members are at the vanguard of developing solutions and new working practices that are driving offshore operational efficiencies and are well-placed to support existing and new operators in the North Sea.

“There is no better evidence of this than the significant fall in operating costs, which is making activity in the basin increasingly viable, even in this new $50-$60-per-barrel environment.

“The interest in the North Sea from new, smaller operators such as INEOS and Hurricane is also a boon for the industry and, with the support of an innovative and technology-led supply chain, can help the Government deliver on its Maximising Economic Recovery strategy for the UK Continental Shelf.”