Total UK: Plans To Reduce N Sea Operating Cost By 20% In 2009
June 11 2009 - 12:06PM
Dow Jones News
French oil major Total SA's (TOT) U.K. unit is aiming to slash
its North Sea operating costs by a fifth this year, renegotiating
deals with suppliers and canceling or postponing non-essential
works, among other measures, the company said Thursday.
"We need to cut (North Sea) operating costs around 20%," said
Roland Festor, managing director of the company's U.K. exploration
and production arm, through a systematic evaluation of existing
service contracts when they come up for renewal, and looking at
which projects could be considered non-essential spending.
Costs have risen exponentially for oil and gas operators in the
North Sea in the last year, partly as a result of a lower price
environment but additionally due to lack of competition between
service providers, and the high cost of labour, the company
said.
But the company emphasized it is still investing and recruiting,
and plans to move forward with development of the Laggan and
Tormore gas fields in the West Of Shetland area of the U.K. North
Sea, and expects to give the go-ahead for the investment in
September.
-By Angela Henshall, Dow Jones Newswires; +44 (0)20 7842 9285;
angela.henshall@dowjones.com