UK, Norway O&G industry to grow significantly in 2024

UK and Norway’s oil and gas industries are expected to experience significant growth in 2024, with companies gearing up for exploration and development opportunities, according to Westwood Global Energy.
UK exploration and appraisal (E&A) activity is expected to continue in 2024, with eight planned exploration wells targeting 325 mmboe.  The UK had a successful year with five commercial discoveries from nine well program completions, with combined resources of around 140 mmboe.  Shell was the most active explorer, participating in three wells and operating two of the five commercial discoveries.
In Norway, 15 commercial discoveries from 29 well program completions were made, with combined resources of around 440 mmboe.
 The Northern North Sea (NNS) was the most targeted basin, with 18 wells and c.378 mmboe in discovered resource.
High levels of E&A drilling are expected in 2024, with 49 planned wells with pre-drill resources of around 2.2 billion boe. Aker BP and Vår Energi are also expected to be active across all basins.
In 2024, UKCS discoveries could be a key year for development, as companies like TotalEnergies, Apache, and Harbour Energy reduced investment plans following a change to the Energy Profits Levy terms in October 2022.
 Despite political and fiscal uncertainty, 20 merger and acquisition (M&A) deals were made, three fields started production, and six fields were sanctioned for development, including the Rosebank project.
 Four fields are expected to be brought onstream in 2024, including the Penguins Redevelopment. Industry uncertainty is slowing the progression of FDP submissions, and the number of project sanctions in 2024 is unclear.
However, FDP and Environmental Statement submissions are expected for several long-stranded discoveries, such as Buchan Redevelopment, Anning & Somerville, and Pilot. A General Election in 2024 could see companies re-assess their positions in the UK E&P sector.
Norway experienced significant growth in the oil and gas value chain in 2023, with numerous field developments and sanctions being brought onstream ahead of schedule.
Seventeen PDOs were approved, with combined reserves of c.1.6 billion boe and an estimated total development capex of $26 billion.
The strength of Norway’s development hopper demonstrates the effectiveness of temporary tax breaks in progressing resources to reserves.
Cost management is crucial during global inflation and supply chain pressures. However, increased development in the Barents Sea faces challenges due to a lack of infrastructure proximity and dependence on export routes.
The Norwegian Offshore Directorate is seeking commercial development solutions for existing discoveries with improved export solutions.
M&A activity in 2023 was lower than 2022, but the total value was significantly higher. Norway has a relatively low number of companies in operation, with fewer opportunities coming onto the market than other countries in the region, states Westwood.
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