Two of the most veteran oil and gas producers in the U.K. North Sea—Royal Dutch Shell and BP—still tie their future to the ageing offshore basin despite a broad retreat in recent years.

Both companies plan to explore this year for new resources in the North Sea, one of the oldest deepwater hubs faced with harsh weather conditions, executives told Reuters.

The two oil giants have sold billions worth of North Sea fields, many of them nearing the end of their life, in recent years. But still they see golden opportunities there as new technologies open up resources that can be profitable with oil trading at about $50/bbl and in some cases lower.

“We like the North Sea. It has been an important hub for us for a long time and it will remain one,” BP Chief Executive Bob Dudley said on the sidelines of the Offshore Europe conference in Aberdeen, Scotland, from where many companies hold their North Sea operations. “This year we will be drilling six exploration wells in the U.K. North Sea. That’s more than we drilled in decades.”

In another sign of confidence, France’s Total last month acquired Maersk Oil, which will see it leapfrog Shell and BP to become the second-largest North Sea producer after Norway’s Statoil.

The parallel investments and retreat in the North Sea come as the basin prepares to dismantle dozens of platforms and plug hundreds of depleted wells that will cost operators including BP and Shell more than $60 billion by 2050.

The North Sea became a major offshore hub in the 1970s. Although its production peaked in the late 1990s, it has staged a modest recovery since 2015.

It is believed to hold an additional 20 Bbbl, according to the British government.

Despite harsh weather and often high costs, the North Sea offers a stable tax regime and guaranteed payments as its oil is sold in industrialized countries with high investment ratings and no military conflicts.

BP, together with Shell and Siccar Point, started production in 2017 at one of the largest projects launched in the region in years, the Quad 204 Field in the west Shetlands.

BP plans to launch another field, Clair Ridge, in 2018 with the aim of doubling production by 2020 to 200,000 boe/d.

At the same time, BP has sold a number of ageing fields, pipelines and terminals in recent years.

Good Margins

Shell’s oil and gas production in the North Sea is set to fall by about 40% to 150,000 boe/d after the planned completion this year of the $3.8 billion sale of a large number of fields and assets to private-equity-backed Chrysaor.

But Shell vowed to remain a key player in the North Sea and invest hundreds of millions of dollars there.

“Shell very much plans to be part of that future,” Shell Chief Executive Ben van Beurden said of the North Sea.

The Anglo-Dutch company plans to drill three to five exploration wells in the North Sea this year, according to Shell’s U.K. Chair Sinead Lynch and Steve Phimister, director of its U.K. oil and gas production, known as upstream.

Shell also aims to maintain stable production of 150,000 boe/d into 2030, which will require an annual investment of between $600 million and $1 billion, the company said.

The North Sea was severely hit by a three-year drop in oil prices, with drilling activity falling to levels not seen since the 1970s, according to Catherine MacGregor, drilling group president at services provider Schlumberger.

But operators rose to the challenge, sharply reducing operating costs and introducing efficiencies that were lost throughout the rally in oil prices to above $100 a barrel in the first half of the decade.

Operating costs in the North Sea have halved since 2014 to an average of about $15/bbl, Dudley said.

“The margin on the barrel in the North Sea is so strong it asks for you to come to invest in the basin to maintain production levels,” Phimister said.

Offshore