UK Leads European Oil Exploration Recovery

The United Kingdom is leading a small recovery in oil exploration in Europe, shows recent figures.

A stable per barrel oil price and 2010′s new tax breaks to compensate for oil exploration activities have pushed explorers in the country’s waters to pursue additional oil investments in quarter three of this year, according to an industry survey.

Over fifty percent of the oil exploration wells spudded in Europe’s north western area are located on the UK’s Continental Shelf, allowing a total of 33.

Although this is lower compared to last year’s 38 wells, this quarter presents some indication of recovery following a slow beginning to this year.

Dealmaking is higher across the region. So far, over 100 projects have been put together for the present year in Europe’s northwest area, an increase of 15 percent from last year. Sixty-four of these deals happened on British sites consisting of farm-ins.

Five out of the seven sites in the United Kingdom coming online this year met the qualifications for the government’s new field allowances this year.

The efforts of the government to increase activity through manipulated tax structures are beginning to seep through and, together with stable per barrel oil prices, technically challenging and smaller fields are becoming a more appealing investment proposition, according to Graham Hollis, an energy partner of Deloitte.

North Sea activity remains below its high level prior to the crisis when oil prices spiked to almost $140. The cost of Brent crude for the year slighty fell to $109.63 following high gains in the wake of the 2008 financial crisis.