The Magazine for Underwater Professionals
Having begun my political “career” almost 70 years ago, delivering pamphlets for the Labour party in 1945, and realising that I have been writing this column for 23 years, I hope readers will allow me some latitude this time. Of course, I was delighted and a little surprised by David Cameron achieving an overall majority in the UK General Election, but problems lie ahead. We need to revise our antiquated voting system and limit political contributions. I am ashamed that it was my trade union, Unite, that ensured Labour’s defeat by supporting the wrong Miliband for the leadership of the party. I have no time for the class war waged by my union head, Len McCluskey, and it is his extreme left wing, out-of-date views that have persuaded so many commercial divers not to join the Professional Divers Association, despite winning compensation and justice for so many divers.
After 25 years of diving, the combination of my left bundle branch heart blockage and the early signs of type 2 diabetes mean that I am unlikely to dive again. I cannot really grumble, as my diving career is in line with that of the most successful divers. I will still enjoy my overseas travel, as most recently to the Divers Institute of Technology in Seattle, USA, and the Canadian Underwater Conference. Luckily two of my recent forecasts have come true.
There has been a sharp recovery in the oil price and takeovers have begun to happen in the industry, with the largest being Shell’s agreed merger with the BG Group. Shell has shown it takes a long-term view by making a bid for the BG Group; the bid seems to be mainly in order to increase its reserves of natural gas, especially off Brazil.
Shell has made clear that it is interested in buying any assets the troubled Petrobras wishes to sell.
Tony Hayward, the former BP chairman, has joined the chorus of those who remain confident of a higher oil price, predicting a price of US$80 a barrel. On the other hand the current head of BP has warned that the North Sea is set for a “painful adjustment” and industry analyst Douglas-Westwood has said that layoffs in the oil and gas industry have totalled almost 100,000 worldwide over the last nine months. With the near 50% recovery in the oil price over recent months it is likely there will be a large increase in shale oil production in America.
It is hoped that the tax cuts in the recent UK budget and further government help will lead to more North Sea work proceeding. The chief executive of Amec Foster Wheeler, one of the biggest oilfield services companies in the North Sea, has said that the North Sea demise fears are “overblown”. Despite the uncertainty created by the desire of the Scottish Nationalists to be in a position to dictate what happens in Britain’s coastal waters, I side with the optimists. At least the Orkneys and Shetlands will make sure that the Scottish Nationalists will never get control of their oil reserves.
Although I remain positive, I was reminded of the increasing capabilities of robots by a talk given at the Master Investor conference by Jim Mellon, a multimillionaire investor. He drew a graphic picture of what robots can do and I was reminded that, when I started work in the City of London in 1960, the stockbrokers for whom I worked had one of the first computers, the size of a small room, which merely seemed only able to produce contract notes. The progress since then has been huge and Jim Mellon forecasted the success of drones and driverless cars.
He also said that the latter increasingly used less petrol and in addition pointed out the sharply reducing costs of solar power. Another potential down side for the price of oil is the sharp decrease in the costs of producing shale oil in America.
The well-respected Douglas-Westwood continues to make mainly optimistic forecasts for the oil and gas industry, although it warns that costs continue to rise sharply. Deepwater expenditure, it forecasts, is expected to increase by 69% by 2019, compared with the previous five years. It also states that the BG Group acquisition has increased the focus on natural gas production, with Chevron’s huge Gorgon project in Australia to begin production later this year. World offshore maintenance modification and operations should rise at an annual rate of 5.4% between 2015 and 2019.
I would point out that it is vital for investors to choose the right company. The optimistic comment by Petrofac, referred to in my last column, was premature, as the company has now made its seventh pessimistic statement, with a loss of US$230 million likely on its Sullom Voe Shetlands project. Meanwhile, John Wood steams ahead, with a number of new contracts announced.
Finally, I was delighted to see that the owner of a UK diving company has been jailed for nine months for the death of a razor clam diver in March 2011 in Scotland. Encouraging news, but why does it take such a long time for justice to be achieved in Great Britain. Luckily, since I came on the scene in 1990, diving here has become much safer. Sadly, this is not the case in America or South Africa, where yet another death, the eighth in ten years, has occurred at a commercial diver training school. I am despairing of the future of the latter country, where a greedy and incompetent president is leading to more social unrest.
Sadly wages for divers are being cut and, in view of the increasing success of ROVs – and how sensible for the Divers Institute of Technology to start ROV intensive training courses – the future prospects for commercial divers looks rather bleak.