Analysts at Wood Mackenzie have released a report claiming that 2011 saw record levels of capital investment in the UK oil industry with the total figure reaching £7.5 billion.
The findings made by Wood Mackenzie hint that, despite the UK’s economic difficulties and tax increases mentioned in the most recent budget, the high price of oil “continues to give companies and investors the confidence to progress projects.”
The report revealed that many companies operating in the UK upstream industry had decided to focus less on E&A operations and more on developing assets and progressing existing projects.
The findings predict that such heavy investment and asset development is likely to be the default posture for the UK oil industry well into 2012 and “until at least 2014, as a result of development projects progressing through companies’ plans during 2011.”
The report also states that despite the “instability of the UK fiscal regime […] US$ 4 billion of assets were traded in the most active UK deal market since 2005.”