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U.K. Oilfields to Attract Funds as Crude Tops $100, WoodMac Says

Jan. 10 (Bloomberg) -- Oil and natural-gas projects on the U.K. continental shelf will attract investments in the next three years as crude prices top $100 a barrel, Wood Mackenzie Consultants Ltd. said.

Energy explorers spent a record 7.5 billion pounds ($11.6 billion) on U.K. projects in 2011, the Edinburgh-based consultant said today in its annual review. Investments will stay “consistently high” until at least 2014 as new fields are developed and existing projects expand, it said.

Brent crude oil rose 13 percent last year, peaking at $126.65 on April 8 as the dollar weakened and Libyan oilfields suffered attacks by forces loyal to Muammar Qaddafi. Brent for February delivery is still trading above $107 a barrel on the London-based ICE Futures Europe exchange.

High prices helped drive a boom in U.K. energy acquisitions in 2011, the most active year for deals in the British oil and gas industry since 2005, Wood Mackenzie said. The biggest transaction was Apache Corp.’s $1.25 billion purchase of Exxon Mobil Corp.’s North Sea assets, announced in September, according to data compiled by Bloomberg.

Britain also released new permits for exploration in its 26th licensing round, awarding acreage to companies including Bridge Energy ASA, North Sea Energy Inc. and Serica Energy Plc.

“The U.K. upstream industry continued on an upwards curve” last year, even with an increase in taxes, Wood Mackenzie said. The licensing round confirmed “the increasing appetite for U.K. exploration acreage,” it said.

Total SA, Statoil ASA and Chevron Corp. are spearheading a $38.2 billion investment drive in U.K. North Sea fields, the consultant said in October. The companies are targeting 50 deposits with an estimated 2 billion barrels of resources, which will account for a third of Britain’s forecast output by 2019.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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