The UK upstream oil and gas sector will be a hive of activity over the coming years, two global energy consultancies have said.
Norway-based Rystad Energy said it expected companies to sanction a “new wave” of field developments through to 2022.
Meanwhile, Wood Mackenzie, headquartered in Edinburgh, said exploration activity on the UK continental shelf had been revitalised.
Final investment decisions (FIDs) could be reached on as many as 38 new UK offshore projects over the next three years, representing £18.8 billion in greenfield expenditure, Rystad predicted.
The market researcher said FIDs would “shrink slightly” this year before rising sharply in 2020 and again in 2021, when it forecasts a new peak of about 18 – worth a combined £7.7bn.
Only seven FIDs are on the cards in 2022, though some of those are major projects commanding serious investment.
Audun Martinsen, head of oilfield services research at Rystad, said: “The largest single development on the list is Hurricane’s Lincoln project, at an estimated £4.5bn, albeit recognizing that its schedule could be hindered depending on the viability of its fractured basement reservoir.
“The largest project likely to be sanctioned before the end of this year is the £830 million first phase of Siccar Point’s Cambo development.”
Mr Martinsen said he wouldn’t be surprised if the contracting work went to the usual suspects in the supply chain – TechnipFMC, Wood and Schlumberger – who have scooped up many of the recent awards.
With more projects get the green light, the engineering, procurement, construction and installation market will grow by 65% over the next three years, with revenues in the subsea and seismic markets to swell by 35%.
Mr Martinsen added: “After several tough years, the sun may finally be ready to shine again on the UK offshore market.”
On exploration, Glenn Morrall, an analyst with Wood Mackenzie’s upstream research team, said drilling was back on the agenda.
Just eight explorations were drilled last year, the lowest level since the 1960s.
But Woodmac forecasts 15-20 exploration well completions this year, a return to the levels witnessed in 2015-16.
Mr Morrall said Chinese firm Cnooc’s 250m barrel Glengorm discovery in the central North Sea had been a “silver lining among the clouds”.
Glengorm was announced in January and hailed as the UKCS’s largest gas find since Culzean 2008.
Mr Morrall said: “We assume the field will be progressed as a multi-platform standalone development, similar to the nearby Culzean field, with gas export via the CATS pipeline and liquids export via Norpipe.”
A number of other prospects, namely Cringletie, Mansfield and Minard are in the vicinity of Glengorm, but current plans to drill these prospects have not been revealed.
Despite recent exploration disappointments at Lyon and Blackrock, both operated by Siccar Point, “volume chasers” will not give up, Mr Morrall said.
He identified Cnooc’s Howick well, west of Shetland, as one to watch.
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