Offshore drilling expenditure in Europe is expected to rise at an average annual growth rate (AAGR) of 6.9%, from about $10bn in 2013 to $12.8bn in 2016, with key contribution from Norway, according to a new report from business intelligence provider GBI Research.

The report, ‘Offshore Drilling Industry in Europe to 2016 – Norway a Driving Force for the European Offshore Drilling Industry, Reserves and Development Projects’, provides an overview of the offshore drilling industry in Europe, including analysis of historical trends and forecasts until 2016.

It includes offshore drilling data analysis of Norway, Denmark, the Netherlands, UK, Russia and former Soviet Union.

GBI Research noted that Norway will emerge as a hub for offshore drilling in Europe as a series of new development projects are coming up over the next two years.

The research firm estimates that Norway will achieve an expenditure of $5bn in 2016, which will be followed by the UK with an expenditure of $4bn.

"GBI Research noted that Norway will emerge as a hub for offshore drilling in Europe."

The countries together hold the highest number of oil wells, representing about 75% of the total offshore drilling expenditure in Europe.

Denmark and the Netherlands are the other two countries with highest number of oil wells after Norway and the UK.

The report said that future development projects, however, may be affected by stringent offshore regulations of the European Union (EU).

Furthermore, offshore exploration involves working in difficult environments, compared with land-based explorations.

Meanwhile, the Norwegian Petroleum Directorate said that it estimates larger quantities of undiscovered oil in the Norwegian Continental Shelf than previously expected.

Image: Map showing oil and gas activities in the Norwegian Continental Shelf. Photo courtesy of Daf-de.