The stock of Royal Dutch Shell plc (ADR) (NYSE:RDS.B) closed at $57.88 gaining 1.49% in yesterday’s trading session. This company and BP plc (ADR) (NYSE:BP) are the top oil and gas producers in the UK North Sea. Despite the broad retreat in the recent years, these two still tie their future to the ageing offshore basin, and their business strategies have been discovered to be pretty similar.
Both Shell and BP have plans underway to in the course of this year explore new resources in the North Sea. It happens to be one of the oldest deepwater hubs experiencing adverse weather conditions. In a joint move they have sold a large portion of the North Sea fields, a large number of them at the verge of extinction.
However, they still continue hoping for golden opportunities in this wake where technologies seem to be opening up a wide array of profitable resources. Oil is currently trading at about $50 a barrel, though in some cases the figure is lower than that.
Bob Dudley, the BP Chief Executive opined, “We like the North Sea. It has been an important hub for us for a long time and it will remain one. This year we will be drilling six exploration wells in the UK North Sea. That’s more than we drilled in decades.”
It was in the 1970s that the North Sea rose to become a major offshore hub. However, the peak of its production is traced to the late 1990s.It has done quite much towards staging its modest recovery and that is why 2015 will go down records as a rather transformative moment for the provider. The British government has laid claims that it has been holding on to about 20 billion barrels.
Harsh weather conditions as well as the extremely high costs are considerable factors especially when it comes to the determination of prices among other things. But the North Sea has been seen to pay quite a major focus on providing guaranteed payments and a stable tax regime which has continued to give it a competitive edge over the others.