NEWS of a surge in third quarter profits at Shell will encourage hopes the industry’s recovery from a long downturn that hammered the North Sea is becoming firmly established.
Shell said it is happy with the shape of a North Sea portfolio that it has shrunk dramatically amid the plunge in crude prices since 2014.
The independent that bought a big chunk of Shell’s North Sea acreage, Chrysaor, confirmed on Wednesday it is planning further growth moves in the area.
It is notable that Shell and BP have found buyers for North Sea assets recently in deals that suggest some international financiers are happy to commit big sums to the area.
While the deals should mean more is spent on the assets concerned than would have been the case without ownership changes how much more is unclear.
With Brent crude back above $60 per barrel, trading conditions are much brighter than they were early last year, when it fetched less than $30/bbl. But the days of $100 oil, which emboldened firms to invest in bumper North Sea developments, remain a distant memory.
Oil services giant Wood Group for one has made clear it does not expect project approvals to rise enough to compensate for the fall seen since 2014, which has been accompanied by massive job losses and pain across the supply chain.
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