Offshore staff
LONDON – UK offshore operators could continue to take a conservative approach toward investments in 2021, according to Oil and Gas UK’s latest business outlook.
The ‘Autumn Snapshot’ warns that it could take the sector up to three years to re-start many projects lost due to the coronavirus and the commodity price downturn.
Sentiment among companies is that market uncertainty and reinforcing challenges brought on by COVID-19 are likely to persist.
Despite the difficulties, UK offshore production levels have remained relatively strong, presently around 3% lower than the 2019 full-year daily average. Production could recover in the current quarter to be more in line with 2019 levels.
However, there are indicators that UK gas demand fell by 16% in 2Q compared with the same period in 2019, and drilling activity across the sector has declined to a level not seen since the early 1970s.
Fifty-four wells were spudded in the first 10 months of 2020, and only six exploration wells, with potentially no further exploration drilling this year.
OGUK’s market intelligence manager Ross Dornan said: “New projects and investments are crucial to providing secure energy, sustaining supply chain capabilities, and ensuring the UK is viewed as a good place for these companies to anchor their resources…
“Securing a North Sea transition deal for this changing industry is critical in ensuring the sector can use its essential skills to help build back better, providing many of the net-zero carbon emissions solutions required for the future.”
11/13/2020
