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North Sea oil and gas drilling reaches record low as offshore wind power thrives

Joseph Flaig

Ambitious new offshore wind power sites are opening while oil and gas exploration drops (Credit: Shutterstock)
Ambitious new offshore wind power sites are opening while oil and gas exploration drops (Credit: Shutterstock)

The drilling of new oil and gas wells in the North Sea has plummeted to record lows, in sharp contrast with recent high-profile achievements in offshore wind.

Total exploration this year is expected to be the lowest since early exploitation in 1965, revealed industry body Oil & Gas UK (O&G UK) in its annual economic report today. Only four exploration wells were ‘spudded’, or started, in the first eight months of the year.

A few miles from the report’s launch in Aberdeen, however, is a giant symbol of another industry’s progress. The European Offshore Wind Deployment Centre officially opened last Friday (7 September), featuring two 8.8MW MHI Vestas turbines, the most powerful commercially installed turbines in the world. The day before, the world’s biggest operational offshore windfarm opened off the coast of Cumbria with enough capacity to power nearly 600,000 homes.  

The UK is the “world leader” in offshore wind, said trade body Renewable UK. There are 37 offshore windfarms, mostly in the North Sea. In contrast to the fossil-fuel sector’s faltering ambition, new wind projects that are under construction, consented or in planning will more than double national capacity from 7.9GW to 19.4GW.

“The offshore wind sector’s growing supply chain includes traditional manufacturing firms and oil and gas companies and their skilled staff, offering services and expertise which grew up around the previous North Sea energy revolution to this new one, in fields such as cabling and providing vessels,” said Renewable UK spokesman Luke Clark to Professional Engineering.

“Former North Sea oil and gas workers are benefiting from this by making the transition into offshore wind, where their transferable skills working in a marine environment are highly valued.”

The oil and gas sector “is at a crossroads”, said O&G UK chief executive Deirdre Michie. “The industry is emerging from one of the most testing downturns in its history. However, the steps that have been taken by industry, government and the regulator have delivered tangible results.”

These include halved operating costs thanks to efficiency improvements driven by new technology. Despite this year’s record low exploration, production from existing wells is on track to be 20% higher than in 2014 – when oil prices plummeted – and more major new projects have been sanctioned so far this year than in the previous two years combined.

Despite a partial industry recovery, the low drilling levels and a “supply chain squeeze” could “threaten industry’s ability to effectively service an increase in activity and maximise economic recovery,” said Michie.

Shaun Reynolds, partner and head of oil and gas transactions at consultants Deloitte in Aberdeen, said: “There is a strong feeling across the industry that we cannot become complacent following an uptick in the oil price. In particular, a key issue persists around the long-term impact of lower levels of exploration and appraisal drilling.”

Both O&G UK and Deloitte, which sponsors some of the industry body’s events, stressed that the sector is a “critical component” in the economy.

“Essential for security of energy supply, supporting hundreds of thousands of skilled jobs and contributing billions to the economy, this is a vital industry,” said Michie. “As our economic report shows, with the right stewardship across the industry, it will continue to play a leading role for many decades to come.”

The renewables sector is also highly ambitious, however. “The UK’s offshore wind industry is aiming to reach at least 30GW by 2030 – enough to supply a third of the country’s electricity needs,” said Clark from Renewable UK.


Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.
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