North Sea Oil: Norway's Pumping, Britain's Lagging

When it comes to oil exploration, big is beautiful. Big and government-owned is even better.

That seems to be the main takeaway from the latest drilling statistics for the North Sea. In the UK part, drilling was down nearly 60% in the second quarter. In the Norwegian sector, it was up 50%.
All this matters because the decline of the North Sea is one of the reasons why the prospects for non-OPEC production look so poor. In its outlook, OPEC revised down its reference case for non-OPEC supply in 2013 by more than 3 million barrels a day. Lower oil prices, it said, had led to cencellations and delays, debt financing was becoming more difficult and lower earnings were limiting equity finance. Non-conventional oil like Canadian oil sands is growing, but again lower oil prices had dampened growth prospects there too.

Of course one of the main reasons for the difference between the UK and Norway is that the Brits have been pumping crude in the North Sea much longer than their Nordic neighbors. Most of the UK’s producing fields are mature and in decline and the ones due to be brought on stream over the next few years will not stop the rot. The Norwegians still have big areas that are virtually unexplored, like parts of the Barents Sea.

Wall Street Journal