Consolidation in the North Sea: How can you make your mark?

Experts believe emerging oil firms will be both hunters and hunted as the consolidation of the North Sea oil sector continues.

Considered in the context of the some new oil frontiers – such as those in Africa, the Falklands and Kurdistan – the North Sea is comparatively mature. But, like these other areas, North Sea oil is booming. Reports Jamie Ashcroft, Proactive Investors

The recently sweetened fiscal environment has boosted the industry’s spend this year to an estimated £11.5 billion, from £8.5 billion in 2011.

Industry interest in the sector is palpable with companies of all sizes competing to secure new acreage and projects.

Indeed, the Department of Energy and Climate Change’s (DECC) 27th licensing round, which closed for applications in early May, has been confirmed as a record-breaker.

It received the highest number of applications since Britain began licensing its offshore oil to private companies in 1964.

The DECC received 224 applications covering a total of 418 licence blocks through the bidding round with the allocations are due to be announced at the end of the summer.

On top of that, the sector has also been gripped by the on-going consolidation of already-licensed assets, through a number of corporate deals. Full article can be seen here

Why is consolidation activity increasing?

Tight capital markets have meant small caps are unable to access the finance and investment they need to be able to take their operations further. This means companies are in a position to be bought out or offered significant funds for their assets and reserves.

What do you think?

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