Oil exploration in the North Sea is poised for a recovery with more drilling and acquisitions this year, driven by privately-owned companies, according to consultancy Wood Mackenzie.
Drilling in the UK sector in 2018 was at its lowest level since the 1960s following the price slump of 2014.
Forecasters now believe 60 wells will be drilled in waters of the UK, Norway, the Netherlands and Denmark and that the Norwegian sector will be the biggest growth region. UK waters are expected to see 10-15 wells drilled, up from eight last year.
Wood Mackenzie said: “Budgets are bigger and company portfolios are brimming with prospects matured through the downturn. The competition for assets in the M&A market will be fierce, particularly in Norway, so growth via the drill bit is attractive.”
Norway’s state-controlled Equinor will lead the way, being the only major company to drill more than a handful of exploration wells in the North Sea this year, as it expects to drill around 20 across Norway and the UK, Wood Mackenzie said.
Wood Mackenzie also forecast continued asset sales by major companies, particularly US majors. “Listed independents and even Asian National Oil Companies cannot be ruled out, but most roads lead to the wave of privately backed/owned companies,” it said.
It was reported in October that £330 billion could be spent extracting oil and gas from UK waters over the next three decades.
North-East MSP Maureen Watt, who co-convenes Holyrood’s cross-party group on oil and gas, said: “The latest projections are extremely encouraging, and are further proof of the strength and resilience of the North Sea oil and gas industry, as it continues to recover from the recent downturn.”