Interest by oil companies in investing in UK waters shows no signs of slowing down, according to professional service firm Deloitte.
Latest activities in the North Sea are highlighted in the firm’s 2011 Oil and Gas Reality Check.
In the report, it said: “As the global thirst for oil continues to grow, exploration and production activity in the North Sea will likely play an important role for many years to come. With a record 356 exploration licences being granted in the most recent round of approvals plus new discoveries, interest in investing in the ageing-but-still productive North Sea shows no signs of slowing down.”
Deloitte said this contrasted sharply with sentiment only a year ago that the financial crisis had made it extremely difficult for energy companies to raise capital.
It added: “With the clutch of recent discoveries, investors have renewed faith that opportunities still exist for companies willing to use new technology to squeeze more oil out of old finds or drill around the margins of previously discovered fields.
“The new discoveries include the Catcher field in the central North Sea, with initial indications of 300million barrels of oil; Blakeney, located east of Aberdeen, with more-modest initial indications of 60-100million barrels; and the Cladhan field north-east of Shetland which, according to industry sources, holds 100-200million barrels.”
Deloitte said these new finds supported the view that capital spending in the North Sea would be increasing.
It added: “This new spending has been based on advances in data acquisition and interpretation.
“Moreover, subsea technology and processes also appear to be playing a pivotal role in extending the production life of the North Sea where fields that were once considered impossible are now becoming technologically and economically viable.
“While the average size of offshore finds in the North Sea appears to be shrinking, the amount of time that can be spent on developing plans for smaller fields can be reduced.
“Many in the industry are leaning towards adopting a standardised, fast-track approach to bring small finds into production more quickly and cheaply.”
The report also looked at the issue of deepwater drilling following the Gulf of Mexico oilspill disaster.
It said: “The tragic Deepwater Horizon blowout accident and subsequent oil spill have given the industry pause, but only a temporary one.
“Despite significant progress in developing renewable and other alternative energy sources, oil and gas will continue to constitute the majority of the world’s energy supply over the next 25 years.
“As many nations struggle to boost their domestic supplies of oil and gas, they are likely to give the go-ahead for more deepwater exploration and production even in light of recent events.
“It is no wonder then that producers are still pursuing deepwater opportunities with zeal.”
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