UK 08:55 Wednesday, 30 September 2026
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Here's the thing, cutting costs is all well and good, indeed getting rid of waste and unnecessary expenditure is essential to create a platform for growth, but without growth, there is no future for the oil and gas business in the UK. Without growth then next year's production will decline and more costs need to be cut and the year after that even more, until one day the only option left is to shut everything down.
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Comments
Striebs
Great article , explains perfectly that growth is necessary for the UKCS .
The UK appears to be becoming increasingly socialist and left wing .
A huge proportion of MP’s , the trade union movement and green NGO’s have made “profit” a dirty word .
Many such people still have defined benefits pensions and thus no comprehension of risk .
If for instance Hurricane went from a £100m company and was bought out for £2billion , they would be screaming for a windfall tax .
Onshore there is little incentive for a company to search for the sweet spots in a shale play if the MP’s will give in to public opinion and either ban it or make the reward less than commensurate with the risk – geological and political .
Unless the message changes , I can’t see why companies which (unlike Ineos) do not have existing interests to protect would want to invest in the UK in oil and gas or anything else .
Even some which do have interests to protect have chosen to abandon the UK rather than invest in upstream energy . E.g. the steel industry have not chosen to invest in onshore shale which would create demand for casing and enable it to invest in tube mills and secure it’s energy supply .
By the time the UK comes to it’s senses and attempts reopening for business it will probably be too late .
Moses30u
Fantastic article, that shows a deep understanding of the U.K. Oil and Gas industry Steve.
Even before the oil price dive, many companies knew they’d have to reduce OPEX to remain productive.
I’m an engineer, with 20 years experience in O&G, recently joined an innovative SME. We constantly get told to reduce our baseline rate though we can make some real and eye- catching cost savings. My arguememt is, that’s the Majors are targeting the wrong innovative companies to hit with the constant slash – we reinvest to innovate and potentially realise further efficiencies.
I believe it’s time that a cultural change is required and the likes of Hurricane are able to change attitudes to make marginal fields viable (though Lancaster is a monster!).Be very interested in keeping in touch, not though a public forum Steve?