North Sea work surges on high prices
The main North Sea countries are seeing strong exploration and development activity, driven by high oil and gas prices and improved investment terms, Martin Quinlan writes
THE North Sea is a busy oil and gas province. For two years,
oil and gas prices have been high and relatively stable, while
explorers have had their interest sharpened by licensing offers
in the UK and Norway. In the UK, investment confidence has been
lifted by last year's tax incentives; in Norway, recent large
discoveries are the attraction.
But - as seen in the past - high activity levels can soon
strain the North Sea area's capacities in construction and oil
services. In the UK, the producers' and suppliers'
organisation, Oil & Gas UK (OGUK), says there are concerns
about "shortages of skilled personnel, wage inflation and a
general escalation of operation costs". In Norway, the
Norwegian Petroleum Directorate (NPD) says there are "capacity
challenges" for operators and suppliers, with availability of
drilling rigs and flotels being particular bottlenecks. The
clearest evidence of an upturn in...