Offshore drilling activity in the North Sea witnessed a fall of 25% in the first quarter (Q1) of 2011, according to Deloitte‘s ‘The North West Europe Review’ report.

Between 1 January 2011 and 31 March 2011, just five exploration and four appraisal wells were spudded in the UK Continental Shelf (UKCS) compared with 12 in Q4 2010, the report revealed; however, the fall cannot be attributed to the recent budget proposition for increased tax rates for the oil and gas industry, but it could set the pattern for decreased activity in the future.

Deloitte Petroleum Services Group managing director Graham Sadler said that the drop is not an unexpected decrease, because fewer wells are drilled during the winter.

“What is clear is that despite the decrease in drilling activity towards the end of last year and the first months of 2011, the outlook for exploration and appraisal activity in the North Sea appeared positive,” he said.

The increasing price of oil and earlier UK Government tax incentives have encouraged firms to return to their pre-recession strategies.

The review indicates that the UKCS has the highest level of drilling activity in the Central North Sea with 55% of all exploration and appraisal wells spudded in the region during Q1 2011.

According to the latest figures, deals for Q1 2011 showed a decline compared with Q1 last year, while farm-in continued to be popular with 13 in Q1 2011, a 62% rise from the previous quarter.