The upstream oil and gas industry called Friday for a focus on reforms needed to revive the UK's flagging North Sea production, following Scotland's decisive rejection of independence in a referendum.
Shell was among those greeting the vote for staying in the UK at Thursday's referendum, following warnings the uncertainty was clouding investment decisions in the UK's main oil producing region.
Shell said it "welcomes the decision by the people of Scotland to remain within the UK, which reduces the operating uncertainty for businesses based in Scotland," it said.
Shell had warned against independence and also voiced concern at a potential further referendum on whether the UK should leave the EU -- a vote that remains a possibility following a general election next May.
On Friday, Shell said it would "continue to work closely with both the UK and Scottish governments to help the industry deliver vital energy supplies through investment in the UK's oil and gas resources."
Others highlighted the need for the UK to stick with plans for an overhaul of an upstream tax regime widely seen within the industry as a drag on investment, as well as the importance of a planned new regulator that would focus on upstream production issues.
UK oil and gas production has fallen rapidly in recent years, with oil output last year down 62% from a decade earlier at 820,000 b/d.
Amid a tight political timetable ahead of next year's election, industry lobby group Oil and Gas UK said that "to safeguard the industry's future, it is particularly important that the government now presses swiftly ahead with fiscal reform," as well as implementing recommendations made earlier in the year on setting up a new, dedicated regulator.
The comments were echoed by Chevron, which said: "We hope the [fiscal review] work will result in ensuring the regulatory and fiscal environment provides a strong foundation to maximize the economic recovery of the offshore oil and gas resource."
ExxonMobil said it hoped the UK government and devolved authorities in Scotland would "work together to promote continued investment" and development of oil and gas.
BP, the target of an angry outburst threatening nationalization by a key figure in the Scottish Nationalist campaign for independence, said: "The North Sea is important to BP and we expect to be an active participant in the oil and gas industry in Scotland for years to come.
"BP will continue to work closely with both the UK and Scottish governments to realise our shared ambition of maximizing economic recovery from the North Sea."
In the downstream segment, traders expressed relief that the potential disruption of a "yes" vote had been averted, including in relation to Scotland's only refinery, Grangemouth.
One trader said nationalization of the loss-making facility "would have been a very real prospect in the early years" of independence simply to keep it open and avoid 100% import dependence. FRAGILE MOOD
Amid a boost to UK business confidence from Thursday's vote, there were signs the country would continue to hold attractions for oil and gas investors, including a benign security environment and high levels of industry expertise.
However, the mood remained fragile, even as some in the sector saw signs of output recovering slightly in coming years following record investment aimed at tackling chronic inefficiency at aging North Sea facilities.
BP CEO Bob Dudley said in July the average rate of "up time" across all North Sea assets was about 57% and that BP's own assets were "not a whole lot above that."
Referendum uncertainty has added to UK industry's underlying issues, which include tax rates as high as 81% for fields approved before 1993, a higher rate than in neighboring Norway.
On top of fiscal reform and the setting up of a new regulator to drive cooperation within the industry, the issue of liability for decommissioning aging assets remains a drag on deal-making in the UK, said Jon Clark, Ernst & Young's oil and gas transaction advisory leader for Europe, the Middle East, India and Africa.
"'Business as usual' has had a degree of a pause with the uncertainty on [the] potential outcome of the referendum," he said. "I think the key now is for the industry and government to get on with the various proposed initiatives. With aging infrastructure there is a time-critical element to all of this."
Amid moves to set up the new regulator in the Scottish city of Aberdeen, and ahead of a December 3 announcement by the government on fiscal changes, the sense of impatience felt by some in the industry has been voiced by Bill Transier, CEO of struggling Houston-based Endeavour International, which has most of its assets in the North Sea.
"The North Sea is a tremendous petroleum system that has been there producing for over 40 years. It still has a lot left behind, but the industry itself, the government, the traditional way in which we do things ... will not allow you to use new technologies, will not allow you to get access to infrastructure," he said last month.
"They changed the tax code on us several times. The tax code is just too high to incentivize investment. ... You have got to look at the facts and say, here are the facts and if we do not do something dramatic fairly soon, something that I consider a national treasure for the UK is going to just go away."
