Deloitte: UK Continental Shelf Drilling Up 64%

UK Continental Shelf (UKCS) is on the up this year as drilling increased in the second quarter of 2012 by 64 per cent about the same period for 2011, says industry advisory group Deloitte.

Between the 1st of April and the 30th of June, 18 new exploration and appraisal wells were drilled on the shelf, the body says, an increase of 64 per cent on the second quarter of last year. Deloitte also said that the number of start-up fields had increased this year overall in 2012 with 8 new fields having come onstream. This outstrips total number of start-up fields in 2009, 2010 and 2011, double the fields started up in 2009 and 2010 and more than the total number of fields started up for the whole of 2011.

Between the new wells, the increased statrt-up fields and a 47 per cent increase the sale and acquisition of oil and gas fields (25 deals this quarter), Deloitte says the outlook for the UKCS is more positive than in the same period last year.

'We traditionally experience a rise in activity during the summer months; however this year’s spur of activity reflects a higher year-on-year increase, MD of managing director of Deloitte’s Petroleum Services Group Graham Sadler said. "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."

The increased interest in the UKCS comes at a time when activity on the Norwegian market is down, Mr. Sadler, perhaps indicating that the trend for activity on the UK Continental Shelf is set to continue.

"Interestingly, we are also seeing a reversal in terms of drilling activity levels in the UK compared to Norway which is down 33 per cent in the last quarter," he said. "This may suggest the recent tax changes introduced by the UK Government are encouraging organisations to look at the North Sea in a more positive light. While we will have to wait until next year to see the full impact, the highly competitive 27th Licensing Round is likely to trigger more exploration and appraisal commitment from companies who are putting down plans for the next two to three years."