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Offshore drilling activity increases by 64%

Offshore drilling activity on the UK Continental Shelf (UKCS) has risen by 64% during the second quarter of 2012, indicating strong growth in the sector.

A report by Deloitte documenting drilling and licensing across North West Europe between April 1 and June 30, shows 18 exploration and appraisal wells were drilled on the UKCS during the period.

Deal activity, where oil and gas fields are bought and/or sold, has also risen by 47% on the sale period in 2011 alongside an increase in field development approvals and start-ups.
This leaves the industry with a positive outlook.

“We traditionally experience a rise in activity during the summer months, however this year’s spur of activity reflects a higher year-on-year increase.” said Jenn Hazlehurst, head of Deloitte’s Energy and Resources practice in the North East.

“We have some way to go before we are back to the levels seen in 2009 and 2010, however the positive announcements in the Government’s March Budget with regards to the extension and change in field tax allowances should encourage further exploration, appraisal and development activity.

“Furthermore, the announcements made to provide more certainty on the decommissioning tax relief, if implemented, should allow companies to recover cash flow previously tied up in financial guarantees for further investment across the UKCS.”

A number of businesses were also found to be making use of the Government’s March Budget announcement, with a number of deals focused on new and existing discoveries, as well as deals involving fields under development or fields that are already producing.

In 2012 so far, eight new fields have come onstream, higher than the total number seen 2011, and more than double those seen in 2009 and 2010.

This was posted in Bdaily's Members' News section by Ruth Mitchell .