Drilling activity is reviving the UK offshore sector, according to the latest North West Europe Review by Deloitte’s Petroleum Services Group.
The number of wells drilled in the UK sector during the first nine months of this year is only 6% below the total for all of 2011.
Additionally, the number of transactions involving UK offshore oil and gas fields is already 5% above last year’s count. And the number of fields granted development approval in the UK this year has surpassed the total in 2011.
Although there was a decrease in the number of exploration and appraisal wells drilled in 3Q 2012 compared to 2Q 2012, the underlying trend is of greater stability, according to Graham Sadler, managing director of Deloitte’s Petroleum Services Group.
“We’re still not seeing pre-recession levels of activity, but there’s a definite feeling of some confidence coming back to businesses operating in the UK continental shelf,” he said.
New field allowances introduced by the government this year, including the shallow water gas allowance, are starting to deliver benefits, and the government’s plans to create more certainty around decommissioning tax relief should stimulate further interest in the sector.
“Along with a sustained high oil price, smaller and technically challenging fields continue to be a much more attractive investment proposition than might have otherwise been the case,” Sadler said.
Seven new UK fields are online this year so far, compared to five in 2011.
Drilling activity fell by 44% in offshore Norway during the third quarter compared to the same period last year, the review found, although activity has largely focused on appraising existing discoveries and exploiting major fields as opposed to new well exploration and appraisal.
No new field development approvals were issued granted by the Norwegian government during the third quarter, and there were no new production starts in this period.