Offshore drilling increased by 64% during the second quarter of 2012 on the UK Continental Shelf (UKCS), when compared to the same period in 2011, according to a new report by Deloitte.
The report shows that 18 exploration and appraisal wells were drilled in north-west Europe between 1 April and 30 June, which also represents a 64% increase on the first quarter of 2012.
Meanwhile, deal activity rose by 47% during this period compared to Q2 in 2011, indicating a positive outlook for the UK oil and gas industry, according to Deloitte.
The company’s Petroleum Services Group (PSG) produces the drilling and licensing review, which documents drilling and licensing across north-west Europe.
Graham Sadler, PSG managing director, said the current year’s increase reflects a higher year-on-year rise.
"We have some way to go before we are back to the levels seen in 2009 and 2010, however the positive announcements in the government’s March budget with regards to the extension and change in field tax allowances should encourage further exploration, appraisal and development activity," said Sadler.
"Interestingly, we are also seeing a reversal in terms of drilling activity levels in the UK compared to Norway, which is down 33% in the last quarter."
Graham Hollis, Deloitte energy partner in Aberdeen, said the UK has experienced a reversal in the type of deals being made.
"A year ago deals were strongly dominated by farm-in activity (where companies offer a percentage in a field to potential partners or investors) as companies looked to spread risk and financial commitments. Across north-west Europe, only nine farm-ins have occurred during the second quarter of 2012, a 58% drop compared to the same period last year," said Hollis.
"Instead, we have seen a 58% rise in the number of asset transactions (fields being bought and/or sold) across north-west Europe, as companies feel the benefit of increased liquidity and are increasingly willing to take risks and spend money on full asset acquisitions."