Top 3 opportunities for North Sea #oil & #gas companies
As a record number of applicants apply to drill in the North Sea, see BBC article here, there seems to be a renewed sense of optimism and hope for a region that was plagued with concern over the UK governments tax hike in 2011. About 60% of the reserves in the UK North Sea have already been extracted, leaving just under half still in the ground and while it is getting ever more difficult to extract more from mature fields operators are jumping to overcome this challenge.
So the UK North Sea clearly has potential, particularly for small cap operators, but what about the rest of the North Sea? It is all too easy to think of the North Sea as a UK asset, but major opportunities lay ahead in the Norwegian North Sea and West of Shetlands.
Here are my top three opportunities for north sea oil and gas companies:
1. UKCS
Yes, the region is maturing but no, it is not reducing levels of interest or investment in the region. With a record number of applicants taking part in the recent licensing round operators must see real value in the region. There are certain challenges to consider when looking to operate in the region – new technology and strategy needs to be developed for maturing fields and this needs to be achieved before decommissioning takes place.
2. West of Shetland
BP have invested billions of pounds in the Clair oil field, the investment will be used to develop infrastructure and the returns they will see from this project will be massive. But they aren’t the only operators with hopes in the West of Shetland, operators such as OMV, DONG E&P and Valiant Petroleum are all developing or looking to develop their reserves in the region.
Some have called this the new north sea and with such high potential the region is a serious contender for offering fantastic returns.
3. Norway
Statoil and Lundin Petroleum’s Johan Sverdrup is the most exciting thing to come out of Norway in the past decade! An unparalleled Norwegian discovery that allowed Lundin Petroleum to develop from a small company to one expecting to see serious financial gain from the Johan Sverdrup. A renewed sense of optimism and a somewhat friendlier tax system means everyone is trying to get a hold in Norway – Lukoil and Chevron are reported to have been vying for acreage in the recent licensing round.
Do you agree? What are the biggest North Sea opportunities for your business?
To find out more about this and more please see the Oil & Gas Outlook North Sea conference at: www.terrapinn.com/northsea
