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Released September 25, 2018 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Oil and gas drilling activity in U.K. waters was down for the first six months of 2018 and is on track to trail a poor 2017 for the full year.
Industry body Oil & Gas U.K. reported that 41 development wells were drilled in the first six months of 2018, compared to 47 in the first six months of last year, which saw a total of 71 across the full year. In addition, four exploration wells and five appraisal wells were spudded in the first eight months of the year, compared to 2017's five exploration wells and one appraisal well for the same period. For the full 2017, there was a total of 23 exploration and appraisal wells--a sharp drop "of more than 50% on just five years ago," the group reported in its Economic Report 2018. There are still 10 billion to 20 billion barrels of oil equivalent to be exploited in the U.K. Continental Shelf (UKCS).
"Industry is emerging from one of the most testing downturns in its history," said Oil & Gas U.K. Chief Executive Deirdre Michie. "However, the steps that have been taken by industry, government and the regulator have delivered tangible results. Despite the improvements seen in recent years, we find ourselves at a crossroads. Record low drilling activity, coupled with the supply chain squeeze, threaten industry's ability to effectively service an increase in activity and maximise economic recovery."
She added: "The U.K. Continental Shelf is a more attractive investment proposition -- our challenge now is to take advantage of this. We have to drive an increase in activity while continuing to find and implement even more efficient ways of working which support the health of supply chain companies whilst also keeping costs under control. It shows that investment conditions remain key to the long-term future of the North Sea industry.
The low rate of development drilling has been blamed on a combination of reduced infill drilling on existing fields and fewer wells in greenfield developments. Fewer greenfield developments is attributed to the decline in the number of fields being sanctioned and the relatively small size of new fields. The scarcity of capital has also meant that only the most competitive and profitable wells have been drilled.
There have been positive developments throughout the year also, the report highlighted:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
Industry body Oil & Gas U.K. reported that 41 development wells were drilled in the first six months of 2018, compared to 47 in the first six months of last year, which saw a total of 71 across the full year. In addition, four exploration wells and five appraisal wells were spudded in the first eight months of the year, compared to 2017's five exploration wells and one appraisal well for the same period. For the full 2017, there was a total of 23 exploration and appraisal wells--a sharp drop "of more than 50% on just five years ago," the group reported in its Economic Report 2018. There are still 10 billion to 20 billion barrels of oil equivalent to be exploited in the U.K. Continental Shelf (UKCS).
"Industry is emerging from one of the most testing downturns in its history," said Oil & Gas U.K. Chief Executive Deirdre Michie. "However, the steps that have been taken by industry, government and the regulator have delivered tangible results. Despite the improvements seen in recent years, we find ourselves at a crossroads. Record low drilling activity, coupled with the supply chain squeeze, threaten industry's ability to effectively service an increase in activity and maximise economic recovery."
She added: "The U.K. Continental Shelf is a more attractive investment proposition -- our challenge now is to take advantage of this. We have to drive an increase in activity while continuing to find and implement even more efficient ways of working which support the health of supply chain companies whilst also keeping costs under control. It shows that investment conditions remain key to the long-term future of the North Sea industry.
The low rate of development drilling has been blamed on a combination of reduced infill drilling on existing fields and fewer wells in greenfield developments. Fewer greenfield developments is attributed to the decline in the number of fields being sanctioned and the relatively small size of new fields. The scarcity of capital has also meant that only the most competitive and profitable wells have been drilled.
There have been positive developments throughout the year also, the report highlighted:
- Operating costs have halved and are now being sustained at around $15 per barrel oil-equivalent
- Production is on track to be 20% higher than 2014
- More major new projects have been sanctioned by Exploration and Production (E&P) companies so far this year than the last two years combined
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
