OIL and gas industry veteran Tony Craven Walker, who runs Serica Energy, has said the shake up in the North Sea could ensure the area has a bright future as he underlined the company’s appetite for acquisitions.

In an update on Serica’s operations, Mr Craven Walker highlighted the benefits of the deep cost-cutting completed by many firms in the North Sea amid the crude price plunge since 2014 combined with moves to more partnership working.

He believes that following two years in which companies have slashed spending in the North Sea, the effect of the reforms may encourage firms to start investing again.

“Though the short-term commodity-price outlook remains uncertain, we are optimistic that the industry re-set of the past two years will underpin the North Sea sector for some time to come, encouraging extension of existing field lives as well as development of many small, as yet undeveloped, new fields,” said Mr Craven Walker.

Following increases in oil and gas prices in the final quarter of last year interest in exploration activity is likely to increase.

Mr Craven Walker noted: “Progress on reducing drilling costs allied to firmer indications on the mid-term direction of commodity prices offer encouragement for companies to look ahead to 2018 and beyond with greater confidence.”

North Sea-focused Serica Energy said it is looking for acquisition opportunities.

Serica, which is based in London, has been generating plenty of cash from its interest in the Erskine field east of Aberdeen, acquired from BP for around £10 million in 2014. Production restarted in August following work on production facilities.

Operating costs on the field are well below $20 per barrel. Brent crude traded at around $55/bbl yesterday.

The company expects to develop a plan this year to bring the Columbus field into production off Scotland at low cost.

Serica welcomed signs of increased industry interest in exploration offshore Ireland, where it has acreage.

It also has interests in exploration blocks in the UK and in Namibia.

Source: www.heraldscotland.com

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