The leading body for North Sea oil contractors sector warned last week that its future was being compromised by ‘unreasonable demands’ to cut margins.
The comments by Syd Fudge, chairman of the Offshore Contractors Association, to guests at its annual dinner in Aberdeen, marked a crack in the united front that North Sea oil companies and contractors have maintained over the past 18 months.
Fudge said oil companies should target drilling costs rather than contractors’ already slim margins to achieve the target of viable production at $8 a barrel.
OCA’s chief executive Iain Bell added that the squeeze was being felt ‘right across the spectrum’ of contractors, and that ‘some of them are really suffering’.
James May, director- general of the UK Offshore Operators Association, which represents the oil companies, rejected the suggestion that its members were targeting contractors’ margins. ‘No one is immune,’ he said. ‘If the North Sea is to remain competitive, operators and contractors alike have to look at overheads and find efficiencies.’
He added: ‘We must continue to work together to ensure that the North Sea emerges in a tougher, leaner state than before.’