NORTH Sea oil and gas producers can look forward to a further cut in equipment costs in the year ahead.
Equipment suppliers have been forced to slash prices to win business after the collapse in the Brent crude price led to a dramatic drop in activity in the basin. In spite of the partial recovery of oil prices, analysts at Wood Mackenzie said producers can expect the cost of leasing equipment such as rigs and subsea kit will drop by a further 10 per cent this year.
Mhairidh Evans, senior analyst at Wood Mackenzie, told Reuters: “Rates are coming down further in the UK North Sea because drilling activity is flat and there remains a huge oversupply in rigs.”
The weak outlook is underlined by figures suggesting only 30 per cent of the available floating rigs in the UK have contracts beyond 2017.
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