Oil and Gas UK, an industry body representing offshore oil and gas companies in the UK, has revealed that exploration activity in the UK last year dropped to its lowest levels since 1965.
Exploration activity deteriorated more than expected in 2014, with only 14 of the expected 25 wells actually drilled. The number of drilled wells includes sidetracks. The downward trend has thus continued since 2009. To remind, there were 15 exploration wells drilled in the UK in 2013.
The report reveals that inability to access capital was cited as the main reason for low exploration activity, which led to the discovery of just 50 million boe that has the potential to be commercially developed.
In its activity survey, Oil & Gas UK paints a bleak outlook for the year ahead, exploration-wise. As few as 8 to 13 exploration wells are forecast to be drilled in 2015 as the lower oil price adds to existing barriers, such as uncertainty of capital and affordable rig availability, the industry body has sad.
Eighteen appraisal wells were drilled,including sidetracks, This was 7 more than expected, but down from the 29 wells drilled in 2013.
No more than 5 appraisal wells are forecast for 2015, a fall that is driven by poor exploration results over the last 4 years, Oil & Gas UK report has revealed.
“This trend is of fundamental concern to all stakeholders and raises questions about the UKCS’ sustainability. It will require concerted effort by all parties to both understand the drivers that have depressed exploration activity and assess the factors that can most effectively lead to an improvement in the outlook,” Oil & Gas UK has said.
Offshore Energy Today Staff