UK North Sea oil drilling work lowest in 15 years

Jan 15, 2015 12:00 AM

The number of oil wells drilled in the British part of the North Sea fell to the lowest level in 15 years last year, data showed on Thursday, underlining the basin's struggle with high exploration costs that have contributed to a decline in output.

Oil and gas explorers drilled just 40 exploration and appraisal wells in the UK Continental Shelf (UKCS) in 2014, 47 percent lower than the average yearly drills over the past ten years, according to data from Deloitte's Petroleum Services Group.

Many large oil companies have cut investments in the North Sea as they see more profitable new fields in emerging areas such as south-east Asia and Brazil.

Oil explorers' high North Sea costs have been compounded by a 60 percent drop in oil prices in the past seven months. 'To sustain its future, the North Sea's stakeholders will need to adapt to a lower oil price environment and reduce costs in order to get through this period of transition,' said Graham Sadler, managing director of Deloitte's Petroleum Services Group.

North Sea oil producer Premier Oil said on Wednesday it was not committing to new exploration work beyond a portfolio of eight key projects, none of which is in Britain. Britain's North Sea players are waiting on a tax revamp that has been promised for March by Finance Minister George Osborne.

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