UK North Sea operators eye ‘near-record’ profits in 2022

North Sea operators will deliver ‘near-record’ cash margins in 2022, according to Wood Mackenzie, amid higher oil and gas prices and following ‘brutal’ cuts of previous downturns.

North Sea upstream principal analyst Neivan Boroujerdi noted that steady production growth, high prices and ongoing capital discipline would help deliver huge cash margins for the upstream sector next year.

“While investment is set to stay near 20-year lows – and there are question marks over government and E&P appetite for new developments – there could be some smaller project sanctions. We also believe deal flow will pick up, even if regulatory uncertainty in the UK will put downward pressure on valuations,” Mr Boroujerdi added.

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