Offshore drilling activity on the UK Continental Shelf (UKCS) rose marginally during the first quarter of 2012, compared to the same period last year. However, exploration and appraisal activities are still 66% lower than in the first quarter of 2008 - the last spike in annual drilling activity - according to the latest industry figures released by Deloitte.

The report, which documents drilling and licensing across North West Europe between 1 January and 31 March 2012, shows 11 wells were spudded on the UKCS during this period, an increase of 22% on the first quarter of 2011.

Despite this, the figures from the latest quarter show a 15% decrease on the final quarter of 2011, as well as a 42% drop when compared with the average number of wells spudded in the first quarter of the last five years. However, analysts at Deloitte say the signs point to a more positive year ahead for the oil and gas industry:

“The difference in activity between the last three months of 2011 and first quarter of 2012 is not altogether surprising. The winter season restricts offshore activities and the number of commitment wells from the 25th and 26th licensing rounds is quite low. In addition, companies continue to be cautious in the face of an ongoing uncertain economic climate,” said Graham Sadler, managing director of Deloitte’s Petroleum Services Group.

“However, more recent figures for March indicate an increase in drilling into the Spring with seven spuds in March compared to a total of four during both January and February. Furthermore, the tax relief measures announced by the Government in last month’s Budget have been welcomed by the industry and this may result in renewed confidence over the course of this year.

Tags: Deloitte