Oil & Gas UK Economic Report 2015

7.3 Drilling

when competing with other less mature provinces for exploration capital on perceived prospectivity, costs, materiality and alignment to portfolio needs. There is an increasing number of drilling rigs being stacked. As at August 2015, 16 rigs are believed to have been laid-up while awaiting work. It is likely some will be decommissioned as drilling programmes are cut in a cash-constrained world.

Drilling Trends Drilling trends across the UKCS reflect the wider issues facing the industry and can be considered a leading indicator of the basin’s health as a whole. As Figure 32 shows, there has been a general decline in drilling activity over the last decade. The rate of E&A drilling has halved compared to a decade ago and development drilling has fallen by about 30 per cent. This fall shows the difficulties the UK faces

Figure 32: Quarterly Drilling Performance

100

Exploration

90

Appraisal

80

Development

70

60

50

40

30

20

10

Wells Drilled including Geological Sidetracks

0

Q1

Q2 Q2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Source: DECC

46

ECONOMIC REPORT 2015