The Courier & Advertiser (Fife Edition)
North Sea set for production upturn
The UK North Sea is expected to see a jump in production and new project sanctions in 2018.
Energy consultancy Wood Mackenzie said up to 14 projects could reach final investment decisions this year, the most since 2013.
They include Premier Oil’s Tolmount project, Shell’s Penguins area redevelopment and Nexen’s phase two development of the Buzzard field.
Production is forecast to reach its highest level since 2010, with output from the basin expected to average 1.9 million barrels per day.
Statoil’s Mariner field and BP’s Clair Ridge project are expected to achieve first oil this year.
Woodmac said it also expected a “new normal” in development spending and exploration activity.
Fifteen exploration wells are lined up for 2018, roughly the same number as last year, with strong activity West of Shetland.
However, development spending is forecast to fall to around £4.5 billion, the lowest level since 2000, due to a dearth of recent project sanctions.
In terms of mergers and acquisitions, Woodmac said it expected deal activity to rise, but the value of trade to drop by about 50% year-on-year to £2.6bn.
Last year’s figure was boosted by Chrysaor’s up to £3bn swoop for a package of North Sea assets from Shell.
Spending on decommissioning will drop from £1.47bn to £1.33bn in 2018 but the consultancy expected a big step up in activity in the North Sea by 2020.
Meanwhile, in a trading update, Premier Oil said it expected its £2bn debt to reduce as output from the newly-commissioned Catcher field ramped up.
Catcher is producing around 20,000 barrels of oil per day, (bopd) but that will triple in the coming months.
The firm’s finances have also been boosted by the sale of more than £150m of assets in 2017.
CEO Tony Durrant said: “As Catcher builds up to 60,000 bopd, 2018 will bring higher production and cashflow, continuing the debt reduction programme.”