OLSO: Petroleum is preparing to ramp up exploration activity in the North Sea but only has plans to drill on the Norwegian side of the border where there are greater incentives on offer. The Aberdeen-based oil and gas firm announced it has been awarded eight new exploration licences covering huge swathes of the Norwegian North Sea in the latest round. Faroe made an ambitious bid for licences off Norway although the fall in the oil price since 2014 had dented many firms’ enthusiasm for exploration. The confident approach reflected Mr Stewart’s belief in the possibility of making big finds in the North Sea. He has noted that the cost of services such as drilling support has fallen sharply amid the deep downturn in the industry triggered by the oil price fall. However, this has not proved to be a big enough spur to convince Mr Stewart that it makes sense to invest in drilling wells in UK waters. The company did not bid for any acreage in the latest UK licensing round. Mr Stewart has made clear that Norway owes much of its appeal to the fact the country provides generous tax breaks for explorers. They can claim rebates of 78 per cent of qualifying spending. Announcing its success in the Norwegian licensing round, Faroe provided more food for thought for ministers who are keen to try to boost exploration in the North Sea. Drilling levels have hit record lows. The company said it has lined up a material and exciting drilling programme for 2018, which is made up of three exploration wells and one appraisal well off Norway.
