AGR Petroleum Services, the oil and gas well management company, has urged smaller, independent operators to be “drill-ready” if they are going to compete with larger rivals in the North Sea.
Representatives from the Aberdeen-based firm met industry professionals in London to highlight the toughening market conditions in the drilling sector.
New entrants to the North Sea provide more than 35% of the total capital invested in the sector, but soaring rig costs and the short supply of available rigs are causing problems for smaller operators who might only have one or two wells to be drilled, AGR said.
The company has pioneered multi-operator rig campaigns which allow several wells to be drilled for a number of clients by taking a rig on long-term hire, and planning several operators’ drilling activity in sequence.
But it has warned operators that to take advantage of rig availability, they should make sure they have all the planning and regulatory work in place.
Martin Ellins, AGR Petroleum’s UK and west Africa manager, said: “Smaller, independent operators are increasingly key to the future longevity of North Sea activity. As exploration and appraisal activity continues to increase in the UK Continental Shelf, few of the wells committed to in the 24th round have been drilled yet, and a large number of blocks have been offered in the 25th round.
“This appetite for exploration and appraisal wells is set against an extremely tight rig market. New-build rigs are predominantly being aimed at the deepwater markets such as west Africa, and so North Sea rig supply is essentially flat and the day rates for contracting drilling rigs continue to increase.”
AGR has seen drilling activity increase significantly in recent months. Having operated eight different drilling rigs in the North Sea on behalf of its clients during the last quarter of 2007, it anticipates drilling more than 25 wells during 2008 in UK waters alone. The company, part of Norway’s AGR Group, has offices worldwide. It employs more than 80 people at its UK headquarters in Aberdeen, and expects to increase its workforce over the next 18 months.
Recommended for you
