North Sea outlook good despite drop in drilling says Deloitte

North Sea drilling activity saw a drop-off over the third quarter of this year following an “encouraging” second quarter, according to a report by the Petroleum Services Group (PSG) of […]

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North Sea drilling activity saw a drop-off over the third quarter of this year following an “encouraging” second quarter, according to a report by the Petroleum Services Group (PSG) of business advisors Deloitte.

The firm said despite the pause, the outlook is still positive and “the North Sea remains a focus for investment.”

Graeme Sheils, energy partner at Deloitte said: “While the most recent drilling figures are lower than expected, one quarter does not tell the whole story. Business confidence continues to be positive around the outlook for UK Continental Shelf (UKCS), with the oil service sector seeing high activity levels on the back of strong production.”

The report found the number of new wells drilled in the third quarter of 2013 on the UKCS fell by around a third when compared to the second quarter. A total of 11 exploration and appraisal wells were drilled during the period – five fewer than in the second quarter and six fewer than in the same period last year.

The slowdown in drilling was accompanied by an upturn in deals. There were 14 reported during the third quarter of 2013 – two more than for same period last year.  ‘Farm-in style’ agreements, where one company takes a stake in another company’s field – often to assist with drilling or development costs – accounted for more than half of the deals.

Oil and Gas UK was less optimistic about the prospects for the North Sea when it published its annual economic report in August, saying it had “serious concerns”.