Group News: December 2014
Key Appointments UK / Singapore: ‘On-the-ground’ capability and resources
Monitor Systems have recruited three project-instrumentation engineers and two business development executives covering Aberdeen and Singapore in support of its regional developments.
“Monitor Systems undertakes rig systems surveys and provides monitoring and instrumentation engineering solutions for jack-up rigs, semi-submersible rigs, platforms, drillships and support vessels all over the world. With our developments in Singapore and representation in Norway, it’s becoming clear that our ‘on-the-ground’ capability and resources in selected regions around the world is vital for our line of business” ... commented Brian Sinclair (MD).
Andrew Threlfall (Singapore) and Chris Yates (Aberdeen-UK) have joined Monitor Systems with many years business development experience and history working for the oil and gas industry.
Singapore (Asia): Andrew joins us with over 22 years of commercial and business development experience covering the offshore oil & gas, energy and subsea industry. Andrew will be responsible for the development of Monitor Systems S.E. Asia Pte Ltd in Singapore.
Aberdeen (UK): Chris joins us with a history in national and international business development and shall work with our commercial manager and marketing manager to create new business opportunities whilst strengthening the global awareness of our products and systems.
Engineering: Monitor Systems have recently recruited three project-instrumentation engineers to support and strengthen its team. The aim is to create a hub of engineering excellence with an increased working capacity and reserve.
All five appointments are key to Monitor Systems, they represent a commitment to growth and progress whilst strengthening our mobility and capability worldwide ..... commented Bruce Reynolds (Director).
Norway (Northern-Europe): The new sales and marketing agreement with JL Offshore AS will see the company offer our products and systems to a varied oilfield client base throughout Norway and beyond. This ‘agreement’ will give Monitor Systems first class representation in Norway, a country and industry that demands the very best standards in design, engineering, installation, commissioning and certification.
There is evidence to suggests that some oil companies are now reducing production because they’re simply not making any profit. A recent survey carried out also shows that the number of rigs actively drilling for oil fell by 29%, from a record high of 1,609 in October 2014 to 1,140 in February 2015.
Vulnerable: There are no winners in the current economic and tax climate. Some oil companies are paying 80%, the highest tax rate on fields in the North Sea whilst 30% in other industries is standard. Stats indicate that we now have a situation where one third of U.K. offshore fields are in negative cash flow, that means approaching 100 fields are vulnerable to closure.
Over Supply: Stats from 2014 show us that more than 90 million barrels of oil and liquid fuels were consumed per day worldwide, and remember there are 159 litres of oil in a 1 barrel, ... that’s a lot of oil. It’s estimated that the U.S. have completed 20,000 new shale wells over the last 4 years, more than ten times Saudi Arabia’s stats; it has boosted America’s oil production by a third. The contest between the shalemen and the sheikhs has tipped the world on its head, from a shortage to a surplus.
Tactics: Saudi Arabia seem to be pushing a competitive tactic; let the price fall and put high cost producers out of business. If successful, that will certainly slow down supply and increase demand, causing prices to rise in their benefit and with their low extraction cost per barrel, you have to sit up and take note. Its estimated reserves of 266 billion barrels, ability to pump as many as 12.5 million barrels a day, and, most important, its low cost of extracting crude makes Saudi Arabia a formidable supplier.
What Next?: Will Opec, (which holds 60% of the world’s reserves and 30% of supplies), cut its own production to try to lift prices? or will they allow a further slide from the current price of $50 barrel a day in the hope of making it impossible for other oil companies to make a profit from their wells, and so ...‘drilling’... them out of business?
‘Control oil and you control nations: control food and you control the people’ ... Henry Kissinger.