North Sea Drilling Rises As Confidence Returns

Drilling in the North Sea continues to rise due to a return of confidence in the oil and gas sectors, according to a new survey.

The report, released by Deloitte, shows drilling activity during the first three quarters of 2012 exceeded the same period during the previous year and is a mere 6% off the total number of wells drilled in 2011.

The number of UK deals on oil and gas fields is up 5% on last year’s total, while the number of fields granted development approval is also higher.

Graham Sadler, managing director of Deloitte’s Petroleum Services Group, which carried out the report, said: "While this quarter’s drilling activity showed a decrease when compared to Q2, cumulatively we can see 2012 eclipsing drilling activity in 2011.


"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."

He explained: "The Government’s efforts to stimulate activity through a series of tax relief schemes are starting to filter through and, along with a sustained high oil price, smaller and technically challenging fields continue to be a much more attractive investment proposition than might have otherwise been the case."

Graham Hollis, energy partner in Deloitte’s Aberdeen office said: "A lot has been done to rebuild investment confidence after the North Sea tax imposed in 2010, which is being demonstrated in these encouraging figures. The UKCS is performing well against the rest of North West Europe across all the key indicators of activity and, particularly when set against the broader economic background, provides reason for future optimism."

(IT)