Drilling deep - an interview with Malcolm Webb, CEO of Oil & Gas UK

Materials World magazine
,
2 Feb 2011
"Question mark" image courtesy of Chris Baker

In the aftermath of the oil spill in the Gulf of Mexico, the spotlight is on the oil and gas industry and deep-sea exploration practices. Materials World talks to Malcolm Webb, the CEO of Oil & Gas UK, for his perspective on the sector.

Q: What was your background before becoming CEO of Oil & Gas UK?

I trained as a lawyer and joined the oil industry in 1974 as a legal advisor with the Burmah Oil Company. Subsequently I worked for the British National Oil Corporation, Charterhouse Petroleum plc and Petrofina SA. My career progressively moved away from law and into general management. In 2000, I was appointed Director General of the UK Petroleum Industry Association representing the UK oil refining industry, and then in 2004 I re-acquainted myself with the part of the business that really makes my pulse race – exploration and production – and joined trade association Oil & Gas UK (then called UKOOA) as its CEO.

Q: What is it that excites you about the sector, and how can it continue to attract young people given the drive towards ‘low-carbon’ techologies?

For me, it was the sheer scale and importance of the industry. When I joined, what was going on in the North Sea was seen as nationally important. Now, I fear, we take it for granted. Also, technically and physically, exploration is impressive. We could not sustain modern life without petroleum or petrochemicals.

We do not have great trouble in attracting new recruits, but it is always something we need to keep working on. Having said that, I do not think we need to beat ourselves up if people want to work with ‘low-carbon’ technologies. I don't see that as a competitive issue.

I think the approach to energy should be a portfolio approach – of course, we should be developing renewable and nuclear energy, and there will be demand for oil and gas for many decades to come. It is up to the oil and gas companies to make sure that we produce oil and gas energy efficiently, and in an environmentally sound and safe way.

Q: What measures should the industry be taking in light of recent incidents such as the Deepwater Horizon disaster in the Gulf of Mexico?

Oil & Gas UK has been heavily engaged in managing the UK industry’s response to the Macondo disaster, which has included the formation of the UK’s Oil Spill Prevention and Response Advisory Group (OSPRAG), a joint industry, regulator, trade union task group.

Through OSPRAG, the industry engaged with all relevant regulators and workforce representatives to re-check all safety systems to ensure they remain fully fit for purpose. While it was concluded they were fit for purpose, it was felt that there were areas that could be improved upon.

One important example is that the UK does not have a ready-to-use capping device to stop the flow of oil from free-flowing wells. The task group sought to fill this gap and that has resulted in a system that can be deployed in any of the waters around the UK, including the more hostile areas. It is now moving into development and should be ready later this year.

Another issue that has been looked at is sharing of best practice. A new forum has been set up called Well Lifecycle Practice Forum. The limits of liability under the voluntary oil pollution compensation scheme (OPOL) have also been doubled.

Q: Do you think the industry is learning from its mistakes fast enough to avoid future disasters?

Yes I do. Remember, the Oil Spill Prevention and Response Advisory Group didn’t wait for the official reports into the Gulf of Mexico incident to be published before it scrutinised UK practices. It responded immediately and has achieved much in the last nine months.

That being said, however, it will still need to reflect on what we can learn now that reports are being released about what went wrong in the Gulf of Mexico.

The USA has a prescriptive regime. In the UK, we have a more dynamic, risk-based regime, based on continuous learning and improvement. I believe we are certainly doing our best. However, the way forward on safety is a never-ending journey and there is no room for complacency. We must constantly be looking for ways to improve.

Q: What was the European Parliament’s attempt to impose a moratorium on deepsea drilling aiming to achieve?

Goodness knows. I can’t believe it would have achieved anything. The formal report of the UK House of Commons Select Committee on Energy and Climate Change subsequently confirmed there was simply no evidence to support the imposition of a moratorium. It would have been a meaningless kneejerk reaction of the worst kind which, among other things, would have done significant damage to the energy security of the UK.

Q: How can deep-sea drilling repair its damaged reputation?

Of course our industry is a hazardous one, however, history shows that we have an excellent record in managing the risks. Many thousands of deep water wells have been safely drilled around the world. Governments and industry working together can (and of course must) ensure the risks are properly managed. We must demonstrate through the example of continuing safe operations that Macondo was an aberration and not to be taken in any way as typical or likely to recur.

We also need to explain the importance of what we do in terms of providing the people of the world with the vital energy of oil and gas – something which is absolutely needed right now and will be for decades yet to come to sustain our modern lives. Oil and gas is essential to the transition over time to a low-carbon economy without serious damage to our health and wellbeing.

A survey Ipsos MORI has recently undertaken suggests that the British people have a better regard for the industry than is generally perceived. They realise that oil is important to their lives.

Oil companies need to keep looking for oil in deep waters and they should not be criticised for doing that, as it is hugely important that we continue to find new reserves of oil and gas to provide the peoples of the world with the energy they need today.

Furthermore, oil companies should not be criticised if they decide not to diversify into being energy companies that are also involved in renewables. That is fine and good for those companies who wish to do that [but] there are [also] plenty of companies that are keen to specialise in renewables and not get involved in oil and gas. Overall, I think it is better to have ‘horses for courses’, than run the risk of loss of focus by demanding a diversified approach from everyone.

Q: Environmentalists have taken to protesting at drilling sites. If this grows what will be the impact on the industry in the UK?

Luckily, there are no signs that the acts we witnessed at the end of last year are continuing, let alone growing in number. I also sense that the public at large is not impressed by these reckless publicity seeking escapades. In my view, the perpetrators of these stunts do more harm to the case that they allegedly support than they do to the operations or reputation of our industry.

Further information

Malcolm Webb, Chief Executive, Oil & Gas UK, 6th Floor East, Portland House, Bressenden Place, London, SW1E

Main image courtesy of Chris Baker