Confidence returns in North Sea C


onfidence appears to be returning to in- vestment decisions being made in the


UK North Sea region, with a number of tax initiatives helping. The latest North West Eu-


rope Review, produced by De- loitte’s Petroleum Services Group, shows drilling activity in the UK during the first three quarters of 2012 has exceeded the same period last year and is just 6% off the total number of wells drilled during 2011. In addition, the number of UK deals - where oil and gas fields are bought and/or sold - reported this year is already up 5% on the total number which took place last year. In November Shell agreed to


buy Murphy Oil’s 5.9% stake in the Schiehallion oil field, taking its interest to 55%.


Shell said the deal offered it access to substantial additional reserves and redevelopment po- tential in the UK, “a current and future heartland for Shell Up- stream in Europe.”


The number of fields


granted development approval in the UK this year has also surpassed the total number of approvals in 2011. While Q3 saw a decrease in


the number of exploration and appraisal wells drilled, when compared to Q2 this year, Gra- ham Sadler, managing director of Deloitte’s Petroleum Services Group, said that the figures il- lustrate greater stability return- ing to the sector.


“While this quarter’s drilling activity showed a de- crease 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 busi- nesses operating in the UKCS.” New field allowances intro-


duced by HMRC, including the shallow water gas allowance, are starting to deliver benefits and the Government’s plans to create more certainty around decommissioning tax relief is likely to encourage further in- terest in the sector. In this edi- tion of OT we take a closer look at these new allowances. Sadler added: “The Gov- ernment’s efforts to stimulate activity through a series of tax relief schemes are starting to fil- ter through and, along with a sustained high oil price, smaller and technically challenging fields continue to be a much


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jo.cooper@imarest.org Offshore Technology November/December 2012


more attractive investment proposition than might have otherwise been the case.” There were a healthy num-


ber of new field start-ups off- shore the UK, with Q3 2012 marking a greater number of new fields coming onstream than in the whole of 2011. Seven fields have come on-


line this year so far, compared to five last year. Centrica recently pumped


first gas from its Ensign field in the UK Southern North Sea. The field is being produced via a normally unmanned plat- form and subsea wells tied back via a new 24km, 10-inch pipeline to the Audrey A platform. Centrica is also targeting first


gas from UK north Sea Rhyl field around the end of this year. The field is being produced as a single well tieback to the North Morecambe platform. A new 12km pipeline hook- ing the field up to the More- cambe North platform has been installed.


The company is also looking to start up output from the first well at York in early 2013. The signs of recovery are there.


John Sheehan


Editor, Offshore Technology john.sheehan@imarest.org


Editor’s Letter


Cover Photo: Offshore workers board a wind turbine with the help of Osbit Power’s MaXccess system


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