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Offshore Oil Projects ‘Stuck In Limbo’ Over Prices

Posted: 18/05/2017

Big companies looking to set up new offshore oil platforms, which would benefit from effective and stringent emergency response plans, are currently in a state of ‘wait-and-see’ over new explorations at present, according to the Financial Times.

Offshore drilling and construction companies are currently encountering an uncertain future when it comes to new projects, waiting to see if the price of crude oil returns to form – that’s the message from the chief executive of Saipem, one of Europe’s largest oilfield companies.

“There is an expectation that things will pick up, but we do not see it yet,” said Stefano Cao. “Industry is waiting for a stronger signal to restart.”

This week, the price of oil fell to its lowest since December, however, prices are 80 per cent higher than the massive 12-year lows, which the industry experienced early last year.

Mr Cao says that the coming year is crucial for how the market recovers and he believes that capital expenditure in new sites will be necessary.

For the UK, the recent budget was seen as a positive for the offshore oil sector in the North Sea, with new measures introduced aiming to support the industry after the oil price slump. Many of these measures look to make the North Sea a more attractive opportunity for investment in new sites to reinvigorate the industry.

The downturn in oil prices has severely affected the industry's workforce, with hundreds of job losses and the need to accept cuts in payment and conditions for work on offshore sites.