Deloitte: North Sea activity remains steady

Outlook for the North Sea sector remains positive, according to Deloitte

Drilling activity in the North Sea remains steady despite a reduction in new wells, a report has suggested.

Accountants Deloitte found drilling activity in the UK Continental Shelf (UKCS) was returning to healthy levels following a prolonged winter.

Figures for the second quarter of 2013 suggested 16 wells were drilled, seven more than in the first quarter, though two less than the same period in 2012.

Deloitte said the figures boded well for the final two quarters of the year.

It suggested momentum was continuing after a poor year in 2011 which had a quarterly average of 12 - the lowest average since 2003.

The report also showed a significant increase in farm-in style agreements, where a company takes a stake in another company's field.

Farm-ins allow smaller companies to benefit from pooling resources and equipment such as drilling rigs.

These deals accounted for about 70% of the total made in North West Europe during the second quarter.

The region saw 30 deals completed, slightly down on the 35 completed during the same period last year.

Innovative technologies

Field developments also remained steady, according to the report.

Two fields were granted development approval from the Department of Energy and Climate Change (DECC), with four other given the green light by the Norwegian Petroleum Directorate.

Only three fields have come on stream in the UK, compared with five in the same period in 2012.

However, Deloitte said innovative technologies meant developments previously not considered economically viable, were now beginning to provide real prospects.

Graeme Sheils, energy partner at Deloitte in Aberdeen, said: "This quarter's stable drilling figures should not detract from the fact that the UKCS is experiencing high activity levels.

"The market is currently buoyed by a number of factors including a stable oil price, increasing investment and government incentives.

"With a more positive domestic outlook also beginning to emerge across the rest of the UK, there is a lot of confidence in the outlook for the North Sea sector."