Drilling activity in the North Sea dropped by 43% for the first six months of the year compared to the same period in 2010 with less than a third of new wells drilled. Analysts at Deloitte’s Petroleum Services Group said activity was lower than would be expected during a time when the oil price averaged above $100 per barrel.
Graham Sadler, managing director of Deloitte’s Petroleum Services Group said: “The reduction in activity is concerning, and is likely to be attributable to a combination of issues including a lack of business confidence in the market generally, over recent months, as well as a possible initial reaction to the UK’s shifting fiscal regime. It’s quite likely that the UK fiscal regime is now being viewed as unstable and, therefore, a less attractive place to invest.”
Deloitte say that the negative trend hasn’t been reflected everywhere in the Atlantic Ocean’s Continental Shelf with Norway recording a 10% increase on their Q2 average for the last decade.
Mr Sadler did say that it was worth remembering the stability the UK had seen over the 2009-2010 period: “It would be sensible to wait until the end of the year before drawing any hard conclusions about the effect that the current economic and fiscal conditions have had. What is clear, however, is that it will take a lot of activity in the next two quarters to get close to the drilling levels we previously experienced.”