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LONDON (Alliance News) - There are to be more new field approvals in the North Sea oil and gas industry in 2018 than the previous three years combined, according to a report from industry body Oil & Gas UK.

Oil & Gas UK is expecting between 12 and 16 new field approvals, totalling more than GBP5.0 billion of new capital, in 2018, compared to just two in 2017 and nine between 2015 and 2017.

The outlook for new projects is boosted by improving oil prices, and one of the major developments in 2018 will be Royal Dutch Shell PLC's Penguins field, announced in mid-January, its first manned installation in the UK North Sea oil region in 30 years.

Regarding the oil price, the rise of which in 2017 boosted the revenue and earnings of oil producers, is expected to average between USD55.00 per barrel and USD65.00 per barrel, compared to USD54.20 in 2016.

However, the body did say drilling remains an area "of serious concern", with less than 100 wells drilled in the North Sea in 2017 for the first time since 1973, when operations in the area where still in their infancy.

Potential risks to the stronger oil price identified in the report are growing US shale production, the threat of countries failing to comply with OPEC quotas, and fears over a possible slowdown in global economic growth.

Total production from the North Sea in 2018 is forecast to be between 620 million and 640 million barrels of oil equivalent, compared to 598 million barrels in both 2016 and 2017.

Costs are expected to rise again. Unit development costs are forecast to rise 19% to between USD13.00 and USD15.00 a barrel after four years of reductions as oil producers focused on operational efficiencies due to lower prices. Overall capital expenditure in the region is forecast by Oil & Gas UK to rise 3% to between GBP5.5 billion and GBP6.0 billion, after three years of sharp decreases.