Wood: oil will eventually go ‘to $75 to $80’

North Sea oil and gas doyen Ian Wood believes the next few years will be the industry’s toughest — with up to 10,000 job losses in the Aberdeen area next year — but that the 2020s  “will be relatively prosperous.”

In an interview with Energy Voice, Wood said: ““I think the 20s will be relatively prosperous for the north-east of Scotland in terms of oil and gas. I think the oil price will go back to $75 to $80 and we’ll be in much better shape because we will have recovered our costs a lot.”

Wood, the former chief executive and chairman of the energy services giant Wood Group, continued: ” … I think the industry will settle down again and get back on its feet. But next year will be a horrible year …

“The big question is will the amount of job losses be a really serious, traumatic blow or something we can see ourselves through?

“I believe next year’s losses could be about the same number we lost this year.

“I’m … going to guess that number is between 8,000 to 10,000 jobs in Aberdeen and Aberdeenshire and I think we could lose the same amount next year.”

Wood added: “I worry for Aberdeen. I worry for the hotels, the pubs, the taxi drivers and everyone who depends on oil in the city.

“It’s going to be trying and we’re going to have to cut our cloth accordingly.

“We will see it through, but it will be hard.”

The full interview with Wood can can be read here: https://www.energyvoice.com

Wood said Aberdeen’s current strength is in oil and gas “operations,” but that the city has never really figured heavily as an oil and gas technology centre — so “we’re going to focus over period of time on developing a really strong oil and gas technology centre.”

Apart from extending the North Sea energy sector’s lifetime, this move into technology would provide an opportunity to try and “anchor” some of the supply chain business in the Aberdeen area.

Creating technology expertise in Aberdeen would help “maintain a strong oil and gas presence in the north-east of Scotland after the North Sea is gone.”

In September, Wood told an industry gathering that in the longer term, the North Sea energy industry would recover and that “hydrocarbons will play a role for many years to come.”

He said Aberdeen would be a significant oil capital for 20 to 30 years but that it would face a huge challenge as it took efforts to diversify its economy and “anchor” its oil and gas skills.

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.