LONDON -- Offshore activities in the oil and gas sector are continuing to fall - the latest industry figures released by Deloitte show that exploration operations within the UK Continental Shelf have decreased significantly in the last 12 months.
Deloitte's North West Europe Review, which summarizes drilling and licensing in the region and as is produced by its Petroleum Services Group (PSG), reports that while the same number of appraisal wells were spudded in the UK during the first quarter compared to the year before, the number of exploration wells has fallen 78%.
Eighteen exploration and appraisal wells were spudded – a 41% decrease in drilling activity on the same period last year. Of those, the majority (44%) of wells were located in the Central North Sea, with a further 28% in the Southern North Sea, 17% in the Moray Firth, and 11% in the Northern North Sea.
"The decrease in activity in the UKCS can be wholly attributed to the sharp drop in exploration drilling as oil and gas companies reassess their priorities in light of the difficult economic conditions," says Derek Henderson, senior partner for Deloitte in Aberdeen. "Cash continues to be a priority as credit conditions remain extremely tough for organizations in the UK, despite the recent base rate cuts."