Big bit parts: confidence back in North Sea

CONFIDENCE is returning to North Sea investment decisions, with drilling activity in the UK Continental Shelf (UKCS) in the first nine months of 2012 ahead of the same period last year, claims a report out today.

The number of wells drilled in the area is just 6 per cent off the total number drilled in the UKCS in the whole of 2011.

The survey from business advisory firm Deloitte also shows that the number of purchases and sales of oil and gas fields in the North Sea is up 5 per cent on 2011’s total.

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Graham Sadler, MD of Deloitte’s petroleum services arm, said although Q3 saw a decrease in the number of exploration and appraisal wells drilled compared to Q2, the overall picture was of greater stability returning to the North Sea energy sector.

He said that “cumulatively we can see 2012 eclipsing drilling activity in 2011”. He added: “We’re still not seeing pre-recession levels of activity, but there’s a definite feeling of some confidence coming back to businesses operating in the UKCS.”

The report said that new field allowances introduced by the taxman, including the shallow water gas allowance, were starting to deliver benefits.

It added that government plans to create more certainty around decommissioning tax relief was likely to encourage further interest in the sector and a “much more attractive investment proposition than might otherwise have been the case”.