LONDON– Spending on UK offshore well services last year reached $3.2 billion, according to the Oil & Gas UK’s 2014 Well Services Contractors Report.
This represents the highest level of capital investment in the sector since 2008.
Oonagh Werngren, Oil & Gas UK’s operations director, said: “The sector has increased gross revenue by 45.5% since 2010 despite a marginal decrease in 2013, and comprises an important proportion of the £35 billion ($54.7 billion) supply chain outlined in the UK upstream oil and gas supply chain reports published byOil & Gas UK and EY earlier this year.
“It is clear that well services contractors are committed to addressing both the challenges and opportunities of the UK continental shelf (UKCS) with total capital investment in equipment and technology to develop future capacity rising by 9.7% to $212 million (£136 million) in 2013. The resilience of the sector in the face ofdeclining exploration has much to do with the breadth of services it provides across the life cycle of well operations including drilling, completion, testing, and maintenance. Respondents to the survey reported strong demand for remediation, redevelopment, and intervention support for existing wells.”
The sector withstood a shortage of personnel and high attrition (staff turnover), maintaining total employment above 15,300 people. The report also noted a continued increase in therecruitment of apprentices.
High operating costs and skill shortages could have a negative impact this year, the report adds, although respondents expressed confidence in the future. This partly reflects the view thatSir Ian Wood’s review of the UK continental shelf’s long-term needs will result in operational improvements across the basin helping to stimulate the current low level of exploration activity.