Statoil: Latest North Sea find “signal of confidence” for North Sea
The struggling North Sea has been given a long awaited “signal of confidence” needed to bring back investment following the oil and gas downturn.
The industry was left reeling following the crude price plunge that started in 2014 and continues to hamper spending in the sector.
Trade body Oil and Gas UK warned in its latest economic report, published last month, that fresh capital investment was needed “urgently” in order to squeeze every last drop out of the North Sea.
Capital expenditure on the UK continental shelf was £8.3bilion in 2016, down from a high of £15billion in 2014.
But a raft of new developments coming onstream this year, coupled with Statoil’s latest multi-million barrel North Sea oil announced yesterday, could be the confidence boost needed to bring back investors, according to industry leaders.
The Verbier prospect is the result of five years of hard work in the UK North Sea for the state run oil firm.
The Norwegian operator announced yesterday it had discovered up to 25 million barrels of reserves after drilling a sidetrack on the well in the outer Moray Firth.
Analysis of the data is still to be carried out but the reservoir has the potential for up to 130 million barrels, the firm claims.
Deirdre Michie, chief executive of Oil & Gas UK, said: “This is good news from Statoil and partners and we now really hope that the find proves to be commercially appealing and proceeds to development.
“It’s also another signal of confidence in the future of the UK Continental Shelf and the kind of development that should further persuade investors of the benefit of putting their money into this basin which still holds billions of barrels of oil and gas.”
North Sea regulator, the Oil and Gas Authority also welcomed Statoil’s announcement yesterday.
An OGA spokesperson said: “This successful appraisal is great news for the North Sea and demonstrates once again there is considerable exploration potential remaining on the UK Continental Shelf, with a number of plays and prospects yet to be exploited.”
Scottish Energy Minister Paul Wheelhouse welcomed the announcement, which he said “highlights the significant potential for oil and gas which still exists under Scotland’s waters”.
He said: “With the right fiscal and regulatory environment, Scotland’s offshore oil and gas industry has a bright future, with up to 20 billion barrels of oil equivalent remaining under the North Sea and in the wider basin.