NORTH Sea assets will be in demand this year with the region set to be a hotspot for deals amid increased confidence in its potential experts have predicted.

Wood Mackenzie reckons a range of buyers will be in the market for UK assets as the retreat of the majors creates opportunities for bargain hunters.

“Some of the Majors have already upped sticks, and while most of those still here remain committed to the region, they have mature fields that could be better off in another operator’s hands,” said the energy consultancy.

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Principal analyst Neivan Boroujerdi said a range of buyers will be in the market for assets.

Some may hope to capitalise on a historic upheaval in the area.

This has seen giants sell billions of dollars worth of North Sea assets following the plunge in the crude price since 2014.

US players such as Chevron have shifted investment to areas in which they see better prospects, such as the US shale fields.

“Expect smaller independents and new International and even financial players to step up,” said Mr Boroujerdi.

He predicted there would be an increase in the number of new developments approved in 2020.

Big developments in line for approval in UK waters include Siccar Point's $2.5 billion Cambo development West of Shetland.

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Firms are preparing to target big exploration prospects across the UK North Sea.

The partial recovery in the crude price since late in 2016 has helped increase the appeal of the North Sea.

The Rystad energy consultancy said yesterday the UK had become a “cost-cutting powerhouse” among global offshore regions amid the downturn that started in 2014.

Rystad said the UK has experienced the greatest reduction in production costs, with the average falling from more than $30 per barrel oil equivalent in 2014 to just $16 per barrel in 2019.

Brent crude traded at around $66 yesterday. The price rose following the US drone strike last week, which killed Iran’s top general Qasem Soleimani but eased yesterday as fears of major conflict subsided.

The Rystad analysis highlights the impact of moves by oil and gas firms to cut costs in the North Sea during the deep downturn triggered by the oil price fall. Industry leaders said these were essential to allow the area to compete for vital capital with other basins.

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The UK North Sea remains a relatively expensive place in which to operate. Growing concern about the threat posed by climate change may cause complications.

Wood Mackenzie noted: “Projects will not only be scrutinised on economic terms, but on their environmental impact.”

Firms have shown willingness to make big North Sea investments in recent months.

On Tuesday London-based Premier Oil agreed to buy North Sea assets from BP and Dana Petroleum in deals worth up to around $900 million in total.

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North Sea-focused Independent Oil & Gas (IOG) said yesterday it is eyeing acquisitions after winning backing from American billionaire Warren Buffett.

In July IOG won support from the CalEnergy Resources business owned by the famed Sage of Omaha for its plan to develop a major new production hub in the North Sea. This will harness the reserves held in a range of discoveries other firms left undeveloped.

CalEnergy paid £40 million for a 50 per cent stake in the project. It also agreed to cover up to £125m of IOG’s costs and to look at other North Sea opportunities with the firm.

“I am delighted to have CalEnergy Resources alongside us in the project as a motivated and financially robust Joint Venture partner,”said IOG’s chief executive Andrew Hockey yesterday.

Oman- based conglomerate MB Holding teamed up with Norway-based private equity investor Hitec Vision in July to buy stakes in a range of fields off North East Scotland from Total for $635m.

Oil services giant Petrofac said yesterday it had won a $50m contract to provide support in the North Sea for a venture formed by MB’s Petrogas arm and HiTec Vision-backed NEO Energy following its asset acquisition.

”We very much look forward to supporting our client’s first UK venture,” said Petrofac.

The Brent crude price fell from $115/bbl in June 2014 to less than $30/bbl early in 2016. It recovered ground following moves by major exporters to curb production.