sea

Oil and gas drilling activity in the North Sea has remained steady, with an optimistic forecast for the next two quarters, according to a new offshore activity report from Deloitte.

The report found that a total of 16 exploration and appraisal wells were drilled in the UK Continental Shelf (UKCS) region during the second-quarter of 2013, which is a slight decline compared to 14 wells in the same quarter of 2012.

The report, compiled by Deloitte’s Petroleum Services Group (PSG), is based on the summary of exploration activities between 1 April 2013 and 31 June 2013.

It forecasts a rise in exploration activities in the third and fourth quarters of 2013 as the region will recover from a prolonged and harsh winter.

According to the report, two additional wells were drilled in the UKCS in the second quarter of 2013, combined to the quarterly average since the end of 2011.

During the second quarter of 2013, 35 new exploration and appraisal wells were drilled across north-west Europe as a whole, compared to 25 wells in the first-quarter of 2013.

"It forecasts a rise in exploration activities in the third and fourth quarters of 2013 as the region will recover."

In addition, 30 farm-in deals were completed in the region, compared to 35 during the same period of 2012.

Deloitte PSG managing director, Graham Sadler, said the latest figures are in line with what would be expected from a mature region such as the UKCS.

"These figures indicate the UKCS remains a strong and productive sector, which bodes well for the final two quarters of the year," Sadler added.

In farm-in style agreement, one firm acquires a stake in another firm’s field primarily to help with drilling or development costs.

"The number of smaller companies operating in the North Sea, as many major firms move to less mature areas, in part explains the significant increase in the number of farm-in deals," Sadler added.

"Farm-ins allow smaller companies to benefit from pooling resources and equipment such as drilling rigs, enabling them to access existing North Sea reserves."

Six fields in the region have already received development approval, while four are actually coming onstream across the UK and Norwegian waters.

Deloitte Aberdeen energy partner, Graeme Sheils, said the market is currently buoyed by a number of factors, including a stable oil price, increasing investment and government incentives.

"With a more positive domestic outlook also beginning to emerge across the rest of the UK, there is a lot of confidence in the outlook for the North Sea sector," Sheils added.


Image: The report found that 16 exploration and appraisal wells were drilled in the region. Photo courtesy of Jenny Embleton.

Energy