Speaking to over 300 delegates, Malcolm Webb said that it would be a "foolish deception" not to recognise that the UK would remain a petroleum economy for many years to come. What is not produced from our own oil and gas reserves will have to be imported, he warned, and therefore it is in this country's best interests for the industry and government to unite across the board to do all they can to support domestic production. This must include a major shift in the regulatory and tax regime for this next, more difficult phase in the North Sea's cycle, he said.
Malcolm Webb said: "We chose the theme of "Competitiveness" for our conference because we believe that is the heart of the matter. The UK offshore oil and gas industry must develop and maintain the capability to successfully compete on an international basis.
"It will take another £300 billion or so to produce our remaining reserves. This money will have to come from private industry and this is not a given. To attract the funds we will have to demonstrate that industry here can make and sustain a competitive margin."
Current record activity in the North Sea masks underlying problems and risks a complacency that would be dangerous, he said. The North Sea is a mature province largely situated in deep, hostile waters. Rising costs, resource constraints, an ageing workforce, a noticeable drop in the number of exploration wells drilled this year, increasing regulatory burden and a tax regime no longer fit for purpose are all adding to the challenge.
Yet Mr Webb told the audience that he firmly believed these problems could be overcome. "The price of failure is so large at individual, corporate and national level, that I think there is no real alternative we simply must succeed," he said.
Radical improvement in the way we work, and radical changes to regulation and taxation will be required if we are to remain competitive in the years to come. Workers, oil companies, contractors, consultants, trade associations, trade unions and Government all have a vital role to play in this."
November 7, 2006