En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Shell, BP tie future to North Sea despite broad retreat


By Ron Bousso

ABERDEEN, Scotland
Petroleumworld 09 07 2017

Two of the most veteran oil and gas producers in the UK North Sea, Royal Dutch Shell and BP, still tie their future to the ageing offshore basin despite a broad retreat in recent years.

Both companies plan to explore this year for new resources in the North Sea, one of the oldest deepwater hubs faced with harsh weather conditions, executives told Reuters.

The two oil giants have sold billions worth of North Sea fields, many of them nearing the end of their life, in recent years. But still they see golden opportunities there as new technologies open up resources that can be profitable with oil trading at around $50 a barrel and in some cases lower.

“We like the North Sea. It has been an important hub for us for a long time and it will remain one,” BP Chief Executive Bob Dudley said on the sidelines of the Offshore Europe conference in Aberdeen, Scotland, from where many companies hold their North Sea operations.

“This year we will be drilling six exploration wells in the UK North Sea. That's more than we drilled in decades.”

In another sign of confidence, France's Total last month acquired Maersk Oil, which will see it leapfrog Shell and BP to become the second-largest North Sea producer after Norway's Statoil.

The parallel investments and retreat in the North Sea come as the basin prepares to dismantle dozens of platforms and plug hundreds of depleted wells that will cost operators including BP and Shell more than $60 billion by 2050.

The North Sea became a major offshore hub in the 1970s. Although its production peaked in the late 1990s, it has staged a modest recovery since 2015.

It is believed to hold an additional 20 billion barrels, according to the British government.

Despite harsh weather and often high costs, the North Sea offers a stable tax regime and guaranteed payments as its oil is sold in industrialised countries with high investment ratings and no military conflicts.

BP, together with Shell and Siccar Point, started production in 2017 at one of the largest projects launched in the region in years, the Quad 204 field in the west Shetlands.

BP plans to launch another field, Clair Ridge, next year, with the aim of doubling production by 2020 to 200,000 barrels of oil and gas equivalent per day (boed).

At the same time, BP has sold a number of ageing fields, pipelines and terminals in recent years.


Shell's oil and gas production in the North Sea is set to fall by around 40 percent to 150,000 boed after the planned completion this year of the $3.8 billion sale of a large number of fields and assets to private-equity-backed Chrysaor.

But Shell vowed to remain a key player in the North Sea and invest hundreds of millions of dollars there.

“Shell very much plans to be part of that future,” Shell Chief Executive Ben van Beurden said of the North Sea.

The Anglo-Dutch company plans to drill three to five exploration wells in the North Sea this year, according to Shell's UK Chair Sinead Lynch and Steve Phimister, director of its UK oil and gas production, known as upstream.

Shell also aims to maintain stable production of 150,000 boed into 2030, which will require an annual investment of between $600 million and $1 billion dollars, they said.

The North Sea was severely hit by a three-year drop in oil prices, with drilling activity falling to levels not seen since the 1970s, according to Catherine MacGregor, drilling group president at services provider Schlumberger.

But operators rose to the challenge, sharply reducing operating costs and introducing efficiencies that were lost throughout the rally in oil prices to above $100 a barrel in the first half of the decade.

Operating costs in the North Sea have halved since 2014 to an average of around $15 per barrel, BP's Dudley said.

“The margin on the barrel in the North Sea is so strong it asks for you to come to invest in the basin to maintain production levels,” Phimister said.


Story by Ron Bousso; Editing by Dale Hudson from Reuters.

09 06 2017

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels


Sept. 14-15,
Accra, Ghana


Nov 13-14 ;
Mexico City, Mexico









Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.