‘Encouraging’ signs for UK oil and gas sector

CONFIDENCE IS returning to investment decisions being made by oil and gas developers operating in the UK North Sea, according to a new report.

The latest North West Europe Review produced by the petroleum services division of Deloitte found that drilling activity on the UK Continental Shelf (UKCS) in the first nine months of this year was just 6% below the full-year total achieved in 2011.

The firm said it believed overall drilling activity in 2012 was on track to finish ahead of last year, while commercial deals relating to UK offshore oil and gas fields was already 5% of the year previous.

The study also found the number of fields granted development approval by the UK authorities in 2012 was already ahead of the total for last year.

However, the survey found there had been a slowdown in exploration and appraisal well activity in the third quarter of 2012 in comparison to the previous three-month period to the end of June.

Graham Sadler, managing director of Deloitte’s Petroleum Services Group, said while there had been a pulling back in the last quarter the outlook as a whole was more settled than it had been for some time.

He said: “While this quarter’s drilling activity showed a decrease when compared to Q2, cumulatively we can see 2012 eclipsing drilling activity in 2011.

“We’re still not seeing pre-recession levels of activity, but there’s a definite feeling of some confidence coming back to businesses operating in the UKCS.”

Mr Sadler said new field allowances by HMRC — including for shallow-water gas development — had been beneficial, and moves to create more certainty around decommissioning tax relief were likely to encourage further interest.

“The Government’s efforts to stimulate activity through a series of tax-relief schemes are starting to filter through

“There’s a definite feeling of some confidence coming back.”

Graham Sadler

I’d like to establish alpaca as a luxurious but cherished item in the wardrobe.

To achieve this I need to find an appropriate smallholding as I am currently renting land. There has to be a farmer out there who can help!

Q— Have there been any big changes in your business or industry?

A— A

lpacas have only

QAQand, along with a sustained high oil price, smaller and technically challenging fields continue to be a much more attractive investment proposition than might have otherwise been the case.”

The UK situation is in contrast with developments in Norwegian waters where drilling activity fell by 44% in the third quarter compared to the same period in 2011. There was also no new production coming online in the period and no new field development consents approved.

Graham Hollis, energy partner in Deloitte’s A berdeen office, said: “A lot has been done to rebuild investment confidence after the North Sea tax imposed in 2010, which is being demonstrated in these encouraging figures.” been introduced in numbers to the UK in the past 15 years. Demand exceeds supply at the moment.

— What is the hardest thing about running your own business?

— Not enough hours in the day, and having to prioritise what you can achieve.

— What is your business calendar highlight?

A— I love covering the shows and sharing my passion with members of the public, many being introduced to alpaca for the first time.

A ngus Show was fab as we received the best showcase stand award.

Q— Any advice to wannabe entrepreneurs?

A— Do your homework, follow your gut and enjoy.

Sue MacBride of Alpaca Loft at her home in Broughty Ferry.