UK North Sea drilling decline may be temporary

North Sea drilling activity in the UK sector slipped back during 3Q 2013, according to the latest review from consultants Deloitte.

Offshore staff

ABERDEEN, UKNorth Sea drilling activity in the UK sector slipped back during 3Q 2013, according to the latest review from consultants Deloitte.

The report, compiled by Deloitte’s petroleum services group (PSG), identified 11 exploration and appraisal wells in progress, six down on the correspondingtotal for 3Q 2012.

Offshore Norway, however, eight more wells were drilled during the quarter than in the corresponding period for 2012.

According to Graham Sadler, managing director of PSG, numerous factors may be behind the UK drilling decline. “While the summer is often a peak period for drilling, the UKCS is a complex region, with a natural ebb and flow of activity across theNorth Sea industry.

“When bidding for exploration licenses, companies make a commitment to the government to drill a certain amount of wells within a certain timeframe. Many companies have commitments from recent licensing rounds which are yet to be fulfilled, so we may well see these materialize in the coming months, drawing a more positive conclusion to the end of the year.”

Graeme Sheils, energy partner at Deloitte in Aberdeen, added: “While the most recent drilling figures are lower than expected, one quarter does not tell the whole story. Business confidence continues to be positive around the outlook for UKCS, with the oil service sector seeing high activity levels on the back of strongproduction.”

Smaller exploration companies continued to show interest in entering the North Sea, he explained: “These players, as well as others, have a vast number of considerations when planning drilling program and there is no doubt that these have altered as a result of the maturity of the UKCS and accessibility to finance.

“The North Sea remains a focus for investment and we do not expect this to change in the very near future.”

10/22/2013

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