North Sea production forecast to rise 5% in 2018
Oil and gas production in the North Sea is forecast to grow by 5% in 2018, however low levels of drilling mean the outlook for future years is "much more uncertain''.
The industry body Oil and Gas UK published its latest Business Outlook report, showing production in 2018 could rise to the equivalent of 620 million to 640 million barrels of oil, up from 517 million in 2014.
But the report highlighted a "serious concern'' about the lack of drilling in the North Sea , with 94 wells started in 2017, the lowest number since 1973.
"Development drilling has fallen by around 45% in just two years, which is a particularly worrying trend for the future health of the basin,'' the report warned.
While the number of jobs supported by the industry fell from 315,000 in 2016 to 300,000 last year, the 4% drop was the lowest for three years "suggesting that companies are beginning to stabilise after tumultuous periods of restructure''.
And a survey of Oil and Gas UK members found more than half (56%) of companies expect to expand their workforce in 2018, with just 6% anticipating further staff cuts.
Oil and Gas UK chief executive Deirdre Michie said: "Our sector is leaner, more efficient and more optimistic than it has been in recent years and 2018 looks set to be a better year.''
While Ms Michie insisted the UKCS was "one of the most attractive mature basins in the world in which to do business'', she also stated that many parts of the supply chain "are still struggling with the impact of the downturn and have yet to benefit from any upturn in activity''.
She said: "It's vital that we keep driving fresh thinking, innovative approaches and efficiency efforts.
"The short-term outlook for our sector is more positive with new projects and new entrants bringing new life to the basin, but there are undoubtedly longer-term challenges."
Alexander Burnett MSP, Scottish Conservative energy spokesman, said: “There are some very encouraging signs in this report that suggest reasons for optimism for the North Sea oil and gas sector in the coming years.
“In particular, I welcome the increase in new investment expected in 2018.
“That is a crucial element that has been buoyed by fiscal measures delivered by the Conservative government at Westminster, which has ensured the UK Continental Shelf (UKCS) has one of the most competitive fiscal regimes anywhere in the world.
“It is clear, however, that we need to see a greater level of exploration in the basin, while there are still challenges facing the supply chain.
“Yesterday’s announcement from Total E&P that 250 posts are to go as part of its takeover of Maersk also shows that ongoing restructuring is still having an major impact on the workforce in the north-east."