UK offshore industry reports renewed North Sea activity

Jul 20, 2004 02:00 AM

The UK offshore oil and gas industry reports evidence of renewed activity across the North Sea, pointing to a pick-up in oil and gas project approvals, better than expected exploration activity, and continuing strong investment since Jan. 1.
The UK Offshore Operators Association issued its 2004 Economic Report. Since Jan. 12, the Department of Trade and Industry (DTI) has approved 12 new oil and natural gas projects on the UK continental shelf, compared with 14 for all of 2003. Exploration also is substantially up, UKOOA said, noting that drilling has started on 22 new stand-alone exploration and appraisal wells since Jan. 1. That compared with 32 for all of last year.

The latest investment outlook suggested that investment is forecast to be up by at least 10 % on 2003. The report also said that the UK will continue to be self sufficient in gas until 2005-06 and in oil until 2007-08. However, indigenous production should still meet 60 % of the UK's gas demand and 80 % of oil demand in 2010, the report said.
"It is encouraging to see signs of activity picking-up, 2 years after the severe set-back to investors' confidence caused by the introduction of the supplementary corporation tax rate on UK oil and gas production. We are currently the world's 7th largest oil and gas producer, but the continuing challenge for the UKCS will be to sustain production in the long term," said Malcolm Webb, UKOOA CEO.

The industry currently is working with the government to convert the North Sea's remaining potential into attractive investment opportunities by tackling the barriers blocking activity.
Issues being addressed include asset trading, implementation of new technology, decommissioning liabilities, supply chain management, the impact of regulation, business practices and behaviours, and the fiscal environment.

Source: Oil & Gas Journal
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