Norway will be Europe’s key offshore oil and gas destination in the near future, with a series of fresh development projects over the next two years driving up the drilling expenditure, according to a new report by GBI Research.
According to the company’s latest report*, offshore drilling expenditure will increase steadily at an Average Annual Growth Rate (AAGR) of 6.9%, from approximately US$ 10 billion in 2012 to US$ 12.8 billion in 2016.
Norway will be the primary contributor to this increase, achieving an estimated expenditure of US$ 5 billion in 2016, followed by the UK with US$ 4 billion.
Combined, Norway and the UK have already proved themselves to be the European leaders in terms of offshore Exploration and Production (E&P), along with drilling investments and activity, having consistently represented around 75% of the total offshore drilling expenditure in the European region.
These countries also boast the highest number of wells drilled annually, followed by Denmark and the Netherlands.
Despite such activity contributing to European offshore drilling industry expenditure, there are still a number of key challenges facing future projects, such as the expected approval of the European Union’s offshore regulations, which are anticipated to lay out much more stringent rules.
Additionally, compared with land-based installations, offshore hydrocarbon exploration involves working in harsher environments and dealing with more operational challenges associated with E&P activity, adding to the complexity of the work.
However, with the Norwegian Petroleum Directorate (NPD) estimating much larger quantities of undiscovered oil in the Norwegian shelf than was previously anticipated, Norway is still proving itself to have strong potential for offshore drilling investments over the next two to three years.
Adapted from a press release by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/exploration/16072013/norway_offshore_activity_to_drive_european_drilling_expenditure/