Oil industry players in the North East have play down fears that the North Sea oil industry could collapse following a fall in global oil prices.
George Rafferty, the chief executive of energy industry development body NOF Energy, said a sense of perspective was needed following media commentary of the oil price fall.
Mr Rafferty was responding to Robin Allan, chairman of the independent explorers’ association Brindex, who told the BBC this week the industry was in “crisis” and that almost no new North Sea projects were profitable in light of the oil price descent.
Speaking to The Journal Mr Rafferty, who insisted he was not downbeat about North Sea oil, said: “The industry is facing challenges but it was facing those challenges before the oil price fell.
“This is a cyclical industry and we happen to be in a trough at the moment. It’s true the number of exploratory wells has declined but is still immense opportunity in the aging infrastructure in the North Sea.
“Our members are working on opportunities in the operation, maintenance and lifespan extension of this infrastructure.”
Following news this week of the closure of oil field services firm Archer’s Blyth office, Mr Rafferty said it was always difficult to forecast the scale of job losses in a downturn or job creation in boom times.
NOF Energy represent some 400 members in the energy supply chain, 92% of which recently cited oil and gas as the most important market for their business heading into 2015.
Mr Rafferty added: “It’s important to remember that many of our members, particularly in the North East, are also exporters who supply products and services around the world – not just to the North Sea.
“Many have also taken the skills and technologies developed on the back of oil and gas projects and employed them in other energy sectors such as offshore wind and nuclear.”
Wellstream International, the manufacturers of flexible pipelines for the oil industry that operates a base on the banks of the Tyne, echoed Mr Rafferty’s comments on investment opportunity in existing infrastructure.
Company spokesperson Neil Gazeley said: “Wellsteam’s Newcastle business is actually part of our globally focussed subsea systems business. Work in the North Sea is very important to the company, but it makes up just part of our world-wide exports.
“The North Sea market is not seeing much in the way of development of new fields but we still see continuing investment in brownfield sites, where a relatively small amount of investment generates a return. The equation there is rather good.
“If we see a long-term suppression of oil prices then this is likely to have global impact. For us though, the outlook for our Newcastle engineering and manufacturing operations is one of expansion.”
Oil and gas industry suppliers Maersk Training, which operates a North Shields facility, said there were still good opportunities despite the fall in global oil price.
The firm’s managing director, Stuart Cameron, said: “Over the next 12 months Maersk Training will continue to make investments in the oil and gas sector, in fact if anything our growth plans will accelerate.
“At a time like this with the potential impact of falling oil prices major operators and contractors need to invest even more in high quality training so, as the industry leaders in this sector, we expect to see an increase in demand for our courses.”