November 27 2014 Latest news:
By BEN WOODS, Energy Writer
Tuesday, February 26, 2013
More than £3bn is to be invested into new wells in the southern North Sea as the gas industry gets set for an upsurge in activity.
Big energy companies will plough the funds into 10 approved drilling projects over the next five years in what energy bosses have described as a “strong upturn” in exploration.
The announcement is part of new research predicting clear signs of growth in the area – with as many as 24 exploration wells expected to be drilled over the next three years.
It has led one energy chief to throw his weight behind the potential of gas exploration, which he believes is bringing better opportunities than renewable and nuclear energy.
Meanwhile, the rest of the North Sea is also expecting an investment boom, as tax changes encouraging exploration are set to spark
a £13bn spend on oil and gas development– the highest figure in three decades.
Mike Tholen, Oil and Gas UK economics director, said: “The outlook for the Southern North Sea is an increasingly positive one with a good number of new investments under way and the first signs of a strong upturn in exploration.
“Operators in the region are gearing up for an increase in drilling activity with 24 exploration wells forecast to be drilled over the next three years, 2013-2015. “Ten new projects have been approved in the southern North Sea since 2011, on which capital investment of over £3bn will be spent in the next five years.”
The Oil & Gas UK 2013 Activity Survey, published yesterday, said there was £11.4bn investment in the UK’s oil and gas sector in 2012, a figure which is expected to rise to at least £13 billion this year.
It said the number of projects submitted to the Department of Energy and Climate Change and given development approval almost doubled between 2011 and 2012.
Simon Gray, the chief executive of the East of England Energy Group said the report quashed the myth that the gas industry was fading.
He said: “The report gives lie to the persistent myth that the industry is on its last legs as it is now providing significantly more opportunity than offshore wind or nuclear and the gas sector continues to providing the backbone of the energy supply in this country.
“With investment in oil and gas set to increase dramatically over the next decade as demonstrated by the £1.4bn investment announced by GDF Suez in the development of the Cygnus gas field off the Lincolnshire coast, it can be hoped that we will see spin off benefits in the ports and supply chain across Norfolk and Suffolk.”
Malcolm Webb, Oil and Gas UK’s chief executive, added: “Here is some really good news for the UK. After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf (UKCS) is now benefiting from record investment in new developments and in existing assets and infrastructure, the strongest for more than three decades.
“The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the Government’s ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead.”
• Coming soon, a special Insight Energy supplement exploring the issues affecting the industry across the East of England.
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