North Sea companies plan cost cuts

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The Independent Online
NORTH SEA oil and gas operators are joining forces to slash costs, writes Frances Shennan.

Representatives of the 20 biggest North Sea companies met secretly last month and agreed to co-operate and swap information. They will meet again this month to discuss both their cost-cutting priorities and how to pass this information on to the 4,000-plus companies that rely on North Sea oil and gas work.

Dr Rex Gaisford, projects director of Amerada Hess, surprised delegates at last week's International Offshore Contracting and Subsea Engineering conference in Aberdeen with his revelation about the plans, to be called CRINE - Cost Reduction Initiative for the New Era.

He said: 'If we continue with the same high-cost basis, more and more of the fields being discovered are going to be sub- economic; they will not be capable of being developed.'

Fewer personnel, he said, would help to contain costs as well as being welcome from a safety standpoint. Simpler platforms would mean fewer specialists, which would keep numbers down, while equipment could be made off-the- shelf instead of being designed from scratch for each field. Facilities could also be shared between companies. That way, said Dr Gaisford, costs could be cut by 25 per cent.