UK's North Sea Prospects Expected to Worsen from 2015

UK’s upstream gas sector is expected to to flourish this year, according to Wood Mackenzie. On the other hand, the energy consultancy explained in its annual review that 2015  ‘could prove to be pivotal with an improvement in exploration success and production performance crucial to ensuring the longevity of the sector.’

Warning that Scottish independence referendum could change the cards on the table, the report noted that North Sea’s prospects could worsen after 2014.

"Due to poor exploration performance in recent years, capital investment is unlikely to be sustained at the current high levels beyond 2015," Lindsay Wexelstein, Head of UK Upstream Research for Wood Mackenzie, said in a note released on Friday.

According to the company, 2013 capital investment in the area reached the highest level in real terms since the mid-1970.

“We anticipate £21.3 billion (US$33 billion) will be spent on capital investment across 2013 and 2014. However, spiralling costs did put pressure on project economics and caused some developments, such as Bressay and Rosebank, to be put on hold,” Wexelstein explained. 

The energy consultancy also underlined that the sector is called to solve three main problems: i. project delays, ii. production underperformance and iii. poor exploration success.