Oil price slump should not affect harbour activity, says port chief
The chief executive of Lerwick Port Authority does not expect any massive downturn in harbour activity as a result of the depressed global oil price.
Sandra Laurenson said that harbour developments over the next three years would remain on track even with the lower oil price.
The longer-term concern is that there is quite a number of fields to the north and west of Shetland and in the North Sea which will not be viable to develop if the price remains low.
Ms Laurenson said: “We could not quantify at this stage what the cost of any delay would be but we are aware that Chevron stopped plans for the Rosebank field west of Shetland. A lot of other fields need a reasonably high price to be economical.
“What we are doing here at Lerwick generally is project support work which needs investment made by oil companies in the physical infrastructure offshore.
“The projects we are working on at the moment will last three years and we do not anticipate any drastic change. We could see in spring that there would not be any new exploration. We had to model around continuing with developments for three years.”
Ms Laurenson added that unless there was a massive change of schedule for the gas sweetening plant at Sullom Voe for the Clair Field, the harbour should not be affected too much.
BP had yet to award contracts for project work to be done onshore in Shetland, but that work should involve the harbour.
Chairman of the SIC development committee Alastair Cooper said next year was a big one for the fossil fuel industry in Shetland with the opening of Total’s Shetland Gas Plant and a refurbishment project at Sullom Voe Terminal.
Preparations will also be under way next year for the gas sweetening plant, whose main work is scheduled for 2016.
This meant a lot of civil engineering and construction activity continuing in Shetland over the next two years.
But Mr Cooper warned that a $60/barrel oil price could spell the end for many of the more marginal fields in the North Sea, with big staff reductions, accelerated decommissioning and a pause in west of Shetland development.
“The difficulty with the Atlantic frontier is that the kit that has to go into the Atlantic frontier is very expensive and the government will have to make it attractive again to keep exploring,” he said.
Mr Cooper expected the oil price to rise again in time. There was a degree of confidence that major west of Shetland developments would get under way again once the low global price rose sufficiently.
• For more see today’s issue of The Shetland Times.