As a percentage of European spending, Norway and the UK unsurprisingly dominate the picture, with consistently from 75% to 85% of capital expenditure through 2011. This spread relates to drilling, completions, subsea wells, procurement, fabrication and installation of fixed platforms, floating platforms, control lines, pipelines, and single point moorings.
In the North Sea, Infield Systems expects decommissioning to represent an increasingly large percentage of total expenditure both now and in the future. Both the UK and Norway have stringent North Sea regulations, adding materially to operator’s costs. This, to an extent, will help explain the periodic spikes that coincide with major decommissioning projects. Decommissioning at Frigg, for instance, started in 2006 and is expected to continue until 2013 at a total cost of $625 million.
With regards to the rest of Europe, expenditure in the southeastern North Sea and northern Adriatic overwhelm expenditure totals in other European areas. In 2005/6, expenditure, for example, was largely influenced by the BBL pipeline development in the southern North Sea, which cost approximately $190 million. The rest of Europe spends can be directly attributed to such Danish developments as the Valdemar B platform and activity in the Croatian/Italian Ika and Ida development areas. The 2008 increase in the rest of Europe category can be linked directly to increasing expenditure off the Adriatic coasts of Italy and Croatia plus completion of the Levante LNG terminal. -George Venturas and Dr. Roger Knight
