HIGHS & LOWS: OIL & GAS
IN THE UK
When the first North Sea exploration licences were awarded in 1964 there were
many who doubted whether oil or gas would ever be found.
The same year, 1964, the first well in the province was drilled by Texaco/Chevron,
160 miles off the coast of north-east England, but it was not until September
the following year the doubts began to disappear when the Sea Gem drilling rig,
working for BP, discovered the first gas field at West Sole.
Even then no one could have imagined the huge impact this as yet unknown industry
would have on the economy of Scotland and the UK.
The West Sole gas discovery became visible on 9 December 1965 when a 40ft flame
was ignited at the top of the rig and became the first flare to appear in the
North Sea. Two years on the gas started to flow commercially and in 1969, the
year Neil Armstrong made his historic moonwalk, Amoco discovered the first oil
in UK waters – the Arbroath field.
It was to be 1975 before the first of the black gold arrived on UK shores from
the Hamilton Brothers’ Argyll field, but in 1972, when a barrel of oil
cost around $2.50, two companies on opposite sides of the Atlantic shared a vision
of the opportunities ahead. Homco International and P&O Shipping had the
foresight to realise that exploiting the riches of the North Sea would soon hugely
overshadow the $20 million spent to put Armstrong on the moon – and they
wanted a piece of the exciting new action.
They joined forces as specialists in the rental of oilfield drilling equipment,
creating the company which for 35 years has been one of the most respected in
the sector.
It was becoming clear that a vast business providing long term wealth was emerging
from the hostile waves that had already brought prosperity to Scotland through
the fishing industry.
However, even the most optimistic would never have imagined that in 2007 the
industry would still be providing employment for almost 400,000 men and women,
would have invested £222 billion in exploration and development and produced
35 billion barrels of oil with the same amount yet to be recovered.
Just before Sea Oil Homco opened for business from a small base at Waterloo Quay,
Aberdeen harbour – BP, Shell and Mobil had found the giant Forties, Brent
and Beryl fields.
By the end of the next year, 1973, the pace was picking up. Shetland and Peterhead
as well as Aberdeen were beginning to grasp the golden opportunities presented
and a total of 550 wells had been drilled.
In June 1975, Tony Benn welcomed the arrival of the first North Sea oil at the
Isle of Grain refinery from the Argyll field and holding aloft a small bottle
announced: “I hold the future of Britain in my hand.” Five months
later the industry received the royal seal of approval when the Queen pressed
the gold-plated button to officially start the flow of Forties oil to the refinery
at Grangemouth on the Forth.
1977 saw the first oil found to the west of the Shetland Isles in what was to
be the Clair field, although it was a further 24 years before technological advances
made the field viable for development, and it was only two years ago production
started.
At that time, UK production was topping 1 million barrels of oil a day and by
1980 the price of oil had risen to touch $40 a barrel.
Production had climbed to more than 2.5 million barrels a day in 1985, and the
North Sea sector saw faster growth than any other province in the world thanks
to a combination of large discoveries like Forties, Brent, Ninian and Piper and
the skill and determination of the operators and contractors, supported by service
companies like Sea Oil Homco.
As the decade progressed, oil prices began to come under pressure; after a period
of $30 a barrel it was feared that in 1986 it would fall to $20. In fact it plunged
to less than $10 and with the drop went thousands of jobs. Many companies became
casualties of the collapse, but Sea Oil Homco’s solid reputation and loyal
customer base helped it through the slump.
However, the oilfield suffered a tragedy far greater than anything economic before
the 80s passed. On 6 July 1988, the Piper Alpha platform became an inferno that
cost 167 lives in a tragedy which changed the face of the industry and had far
reaching safety consequences.
By the start of the 90s there were 100 fields in production in the UK and the
number was rising rapidly when, in 1993, Homco International was acquired by
Weatherford and Sea Oil Homco became the 100% P&O owned
P&O Oilfield Services.
Demand for the company’s high quality equipment rose as development drilling
reached record levels. The number of fields in production more than doubled to
204 by 1998 – but again the price of oil was dropping and in 1998 it collapsed
once more to less that $10.
This time the leaner industry was prepared and, like many in the industry, Premier
Oilfield Services – as it became in 1996 following a management buy-out – put
in place a strategy to prepare for the 21st century and could foresee a prosperous
future.
The discovery of the Buzzard field, the largest find in British waters in more
than a decade, was made in 2001. It was in this year that Premier branched out
and set up a base in Great Yarmouth, supporting the southern sector.
As the UK experienced a slump in 2002, the government introduced the Fallow Initiative
and the ‘Promote’ licence to stimulate activity in the UKCS. Premier
looked overseas to grow its business with establishment of the UAE and Dutch
facilities offering dedicated support to the Middle East and European markets.
The following year saw an upturn with the 21st licensing round and 27 new entrants
to the UKCS. Capitalising on the influx of independent operators to the North
Sea and international markets was the key to prosperity for Premier as Aberdeen
consolidated its position as the energy capital of Europe and established itself
as a global hub.
Also in 2003, Premier Oilfield Services became Premier Oilfield Rentals, part
of the Louisiana based Superior Energy Services group, a move that enhanced opportunities
for both companies to expand geographic focus and gain footholds in new markets.
Further developments came in 2004 with the arrival of Frontier Licences offering
large areas of the demanding and technically difficult Atlantic Margin region
to the west of Shetland. The same year, Premier continued its expansion with
the development of a facility in Nigeria to provide equipment to its clients
for their West African deepwater projects.
At this time oil prices were once again on the rise, peaking at a record $78
a barrel in July 2006. High oil prices brought increased exploration and production
activity not only in the UKCS, where 63 exploration wells were drilled in 2004
alone, but around the world.
A milestone in UK oil and gas history was reached in October 2006 with the spudding
of the 10,000th well in the seabed around the British Isles. The well, a sidetrack
of the Clair field appraisal, was drilled by BP on behalf of the Clair owners.
2007 sees the UK oil & gas industry still going strong with many of the early
discoveries, including Brent, Forties and Beryl, still producing as well as first
oil from the Nexen-operated Buzzard field and further exploration on the horizon
with the 24th licensing round.
Through the highs and lows of exploration and production, Premier has stood the
test of time and continues to offer quality, service and reliability to clients
in its home North Sea market and around the world. |
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| 1970s: The opportunities
ahead led to enormous levels of activity, constructing
the North Sea infrastructure
that’s still largely with us in 2007. |
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| 3rd November 1975: The Queen formally begins the
operation of the UK's first oil pipeline. |
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| 1984: A fleet of mobile inspection units took the
Sea Oil Homco Inspectors around the UK and across
Europe. |
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| 1993: The company name may have changed but the
signature yellow paint on the handling equipment
has remained. |
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| 1999: The in-house inspection
division is fundamental to Premier’s high
standard of service. |
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| 21st Century: Buzzard, the
UK’s largest oil
discovery for more than 10 years, began producing
in 2007. |
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| 17th June 1975: The oil tanker Theogennitor docks
at BP's refinery at the Isle of Grain in the Medway
Estuary, Kent. The tanker is carrying first oil from
the Argyll field, 225 miles from Edinburgh. |
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| 1981: Then, as now, people are key to the success
of Premier. |
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| 1992: Premier’s headquarters
in Aberdeen have expanded over the years as the
business has
grown. |
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| 1995: Brent Spar, one of the first North Sea installations
to be decommissioned, hit the headlines. |
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| 2005: Quality, service and reliability available
24 hours a day, 365 days a year. |
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| 2007: Premier’s engineers
perform computer modelling to analyse drill string
configurations
to offer optimised rental solutions. |
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