U.K., NORWAY TO PACE INCREASE IN OFFSHORE OUTPUT

World offshore oil and gas industry spending will grow at a rate of a little more than 3%/year to $84 billion in 1995. Meantime, offshore oil production will rise 16% from 1991 to 1995, while offshore gas flow will grow 18%. Much of this gain will be in the Norwegian and U.K. North Sea. World exploration will maintain its level. Last year 1,017 exploration wells were drilled, compared with an expected 1,134 in 1995. Those are the conclusions of Mackay Consultants, Inverness, U.K., which

July 19, 1993

2 min read

World offshore oil and gas industry spending will grow at a rate of a little more than 3%/year to $84 billion in 1995.

Meantime, offshore oil production will rise 16% from 1991 to 1995, while offshore gas flow will grow 18%. Much of this gain will be in the Norwegian and U.K. North Sea.

World exploration will maintain its level. Last year 1,017 exploration wells were drilled, compared with an expected 1,134 in 1995.

Those are the conclusions of Mackay Consultants, Inverness, U.K., which predicts North Sea exploration will fall as activity increases in other regions.

Offshore wells accounted for 26% of world oil production of 22.96 billion bbl in 1991, growing from 23.4% in 1988. Likewise, the offshore sector contributed 17.1% of the 77.39 tcf of gas produced worldwide in 1991, up from 13.8% in 1988.

"We expect these trends to continue over the next 3 years to 1995, although the rate of growth in the offshore sector's share may not be as high as in the 1980s," Mackay said.

The most significant increase in oil production will occur in the North Sea, Mackay said, where output will rise 41% from 1991 to 1995, compared with the world average of 16%.

North Sea and western European oil production will grow 29.8% from 1992 to 1995. Production will rise in Norway, U.K., Denmark and Netherlands but not in Germany.

Most of the 15% decline in North Sea and western European exploration and appraisal drilling from 1992 to 1995 will occur in U.K. and Norway. Those two countries account for 83% of the region's current exploration outlay, but this is expected to fall to about 80% in 1995.

Total spending off Northwest Europe will fall from $30.81 billion in 1992 to $27.53 billion in 1995. The largest slides are expected in the U.K. (19.3%) and Denmark (20.8%), while expenditures will rise slightly in real terms off Norway and Ireland.

"This contraction in offshore spending will be the largest in the world and will reduce the North Sea and western Europe's dominance of the offshore industry," Mackay said.

"It is mainly a consequence of the very high level of activity in the U.K. sector over the past decade which, in our opinion at least, cannot be maintained for much longer."