THE recovery in North Sea exploration activity will continue this year although oil and gas firms will keep an increasingly close eye on spending globally amid the shift to a lower carbon economy, experts have predicted.
Oil and gas firms could do much more to tackle climate change says watchdog
Wood Mackenzie said the exploration sector entered 2020 facing extra pressure as a result of the expected energy transition.
However, a North Sea specialist at the consultancy, Glenn Morrall, forecast up to 20 exploration wells will be drilled in the UK sector in 2020 leaving activity levels in line with last year.
He said 2019 saw the highest number of wells drilled in any year since 2013.
Mr Morrall noted that majors such as Total and Shell will be active in the area this year.
Biggest find in more than a decade shows still lots to go for in North Sea
Drilling levels plunged to record lows in the North Sea amid the downturn triggered by the crude price plunge from 2014. The partial recovery in the oil price since late 2016 has encouraged firms to look again at the North Sea.
Wood Mackenzie said some investors were questioning the need for any exploration given the scale of existing undeveloped finds around the world.
Some firms could shift their focus to new energy businesses. Others are increasing their exposure to gas, a less carbon-intensive energy source than coal. Companies will focus on big prospects, mostly in new and emerging plays.
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