New oil drilling and exploration leaps ahead by 40% – in Norwegian North Sea – while UK sector slumps by 50%


Malcolm Webb, Chief Executive, Oil and Gas UK
Malcolm Webb, Chief Executive, Oil and Gas UK

Two recent reports by independent industry analysts have confirmed a slump in North Sea oil well drilling and exploration in the UK sector.

In contrast, exploration drilling has leaped ahead by more than 40% in the Norwegian North Sea – demonstrating the ‘parlous’ state of exploration in the UK.


Malcolm Webb, Chief Executive, Oil and Gas UK, commented; “Deloitte’s latest report, together with latest figures from Wood Mackenzie’s annual review and data released by the Department of Energy (DECC), demonstrates the parlous state of exploration in the UK continental shelf (UKCS).


“We are not drilling enough wells in UK offshore waters and those that we are drilling we are not finding enough oil and gas.

“Contrast this against the 41%  uplift in drilling activity on the Norwegian side of the shelf and its clear to see now is the time for concerted action by DECC, HM Treasury and the industry if we are to maximise economic recovery of our offshore oil and gas resources and sustain future production.

“This worrying trend has been growing for some time. It started in 2011 with a 50% drop in the number of exploration wells drilled, which has since failed to recover. Our members tell us that drilling rig availability and the ability of smaller companies to secure equity capital are major hurdles. 

“The paradox is that in 2013, the UK saw a record level of capital investment at over £13 billion. We now have a two speed North Sea. On the one hand we have seen tremendously strong development activity from a small number of large, highly robust projects plus a greater number of smaller ones only made commercial by targeted reductions in unsustainably high tax rates, ranging from 62% to 81%.

“Meanwhile, production from existing fields has fallen significantly and the total number of exploration wells has slumped. Unless we do something about exploration now, we face a risk of a collapse in capital spend in a few years’ time and hence lower future production.”


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