UK Pushes Offshore Potential

Don't Let the Blocks Lie Fallow

The oil and gas business continues to be among the crown jewels of the United Kingdom's economy, sustaining an impressive performance for over three decades -- and through innovative approaches, officials mean to keep it that way.

"There is still a great deal of oil and gas remaining to be found and developed in the basins of the UK," said John Brooks, director of exploration and licensing for the UK Department of Trade and Industry (DTI). "There are tremendously prospective frontier areas such as the Atlantic Margin that have barely been touched.

"Even the prolific North Sea still has a great deal of potential," he continued, "but all these areas require new ideas and cutting edge technology.

"We are committed to working with oil companies so that this potential can be realized through new concepts and techniques."

'Snuggle' Exploration

Although officials are excited about new onshore plays (See September EXPLORER), the offshore sector is still the UK's bread-and-butter, and Brooks said it is critical to continually foster new activity in the mature basins of the North Sea as well as frontier regions.

According to Brooks, maximum remaining discovered reserves are estimated to be 13.2 billion barrels of oil and 63.4 trillion cubic feet of gas. The UK's undiscovered recoverable reserves are estimated to be two to 18.7 billion barrels of oil and 15.5 to 56.3 trillion cubic feet of gas.

The United Kingdom Offshore Operators Association has conservatively estimated that there will be a sustained aggregate of 11 to 15 new field developments in the UK offshore yearly through at least 2020.

While the greatest potential for major new discoveries lies in frontier areas like the Atlantic Margin, there is considerable remaining potential in the more mature North Sea provinces, where subtle stratigraphic and structural plays as well as deeper reservoirs will be key.

"Today the focus of companies in the North Sea is what some term 'snuggle' exploration -- looking for small satellite fields of up to 50 million barrels of oil that lie close to existing infrastructure," Brooks said.

That approach has proven to be successful -- and, according to the DTI, over two thirds of the undiscovered reserves in the UK sector of the North Sea could lie within 50 kilometers of existing infrastructure.

Image Caption

The picturesque, chalk-dominated coast at Beachy Head on the south of Dorset are an outcrop of reservoirs at the UK's Ekofisk play. Photo by Paul Tod, British Geological Survey

Please log in to read the full article

The oil and gas business continues to be among the crown jewels of the United Kingdom's economy, sustaining an impressive performance for over three decades -- and through innovative approaches, officials mean to keep it that way.

"There is still a great deal of oil and gas remaining to be found and developed in the basins of the UK," said John Brooks, director of exploration and licensing for the UK Department of Trade and Industry (DTI). "There are tremendously prospective frontier areas such as the Atlantic Margin that have barely been touched.

"Even the prolific North Sea still has a great deal of potential," he continued, "but all these areas require new ideas and cutting edge technology.

"We are committed to working with oil companies so that this potential can be realized through new concepts and techniques."

'Snuggle' Exploration

Although officials are excited about new onshore plays [PFItemLinkShortcode|id:20327|type:standard|anchorText: (See September EXPLORER)|cssClass:asshref|title:read more|PFItemLinkShortcode], the offshore sector is still the UK's bread-and-butter, and Brooks said it is critical to continually foster new activity in the mature basins of the North Sea as well as frontier regions.

According to Brooks, maximum remaining discovered reserves are estimated to be 13.2 billion barrels of oil and 63.4 trillion cubic feet of gas. The UK's undiscovered recoverable reserves are estimated to be two to 18.7 billion barrels of oil and 15.5 to 56.3 trillion cubic feet of gas.

The United Kingdom Offshore Operators Association has conservatively estimated that there will be a sustained aggregate of 11 to 15 new field developments in the UK offshore yearly through at least 2020.

While the greatest potential for major new discoveries lies in frontier areas like the Atlantic Margin, there is considerable remaining potential in the more mature North Sea provinces, where subtle stratigraphic and structural plays as well as deeper reservoirs will be key.

"Today the focus of companies in the North Sea is what some term 'snuggle' exploration -- looking for small satellite fields of up to 50 million barrels of oil that lie close to existing infrastructure," Brooks said.

That approach has proven to be successful -- and, according to the DTI, over two thirds of the undiscovered reserves in the UK sector of the North Sea could lie within 50 kilometers of existing infrastructure.

Exploration opportunities in the North Sea province include:

  • The syn-rift section, where significant new reserves have been proved -- in fact, an estimated 40 percent of additional reserves could be discovered in this section.
  • The post-rift Paleocene play remains highly prospective, containing an estimated 45 percent of undiscovered oil.
  • Pre-rift Carboniferous and Devonian plays have yet to be adequately evaluated, but recent discoveries in the Carboniferous may point to significant future potential.
  • Heavy oil, which is a major resource on the graben margins and particularly on the East Shetland Platform, may be commercially viable in the future as technologies emerge that will allow this oil to be economically produced.

Use It or Lose It?

The Oil and Gas Industry Task Force has set an objective of maintaining UK continental shelf production at three million barrels of oil equivalent per day into the year 2010 -- an initiative that should help sustain activity and perhaps stimulate new orders for the fabrication sector.

One area of concern in the North Sea, however, is fallow blocks -- blocks that have been licensed to companies but have not seen any drilling activity for six years or more -- and undeveloped discoveries.

The UK has about 200 offshore fallow blocks and 150 undeveloped discoveries, and earlier this year the DTI kicked off an initiative to try and persuade oil companies to take a fresh look at these blocks or turn the acreage over to other firms with new exploration concepts.

"By the end of June 2001 we would like to whittle the number of fallow blocks down to single figures," Brooks said, adding that "we've conducted an in-depth study and have an action plan for nearly every fallow block.

"Our challenge to industry is, 'If you have fallow blocks and don't have plans for them, why not turn them over to a company that has new ideas and would consider them a valuable asset?"

"We also are looking at the potential for cluster developments for undeveloped discoveries," Brooks said, "combining several smaller fields into one development to make it economically viable."

Marginal fields are a great concern to the government. Over two billion barrels of oil equivalent lie untapped in the 99 most significant undeveloped discoveries in the UK North Sea.

Barriers to development may lie in reserve sizes near or below the perceived economic threshold, but in a significant number of cases they are rooted in other commercial or technical factors. Clusters of marginal fields can be recognized that might form the basis of a joint development plan from a number of operators.

Technical Strides

Technological advancements are key to future exploration in the North Sea.

The Oil and Gas Industry Task Force estimates that by improving recovery in existing fields with technologies available today an additional 1.3 billion barrels of oil equivalent can be added to the reserve base. Technologies have been identified that with further development over the next five years could bring on stream an additional 4.3 billion barrels of oil equivalent of reserves.

"Of immediate importance are technologies that are developed but believed under-used and technologies at a near-market stage of development with the prospect of implementation in the short or medium term," Brooks said.

These include:

  • The improvements in imaging achieved by the introduction of multi-component, high resolution seismic.
  • Gains in well efficiency by the use of "finder" wells -- wells engineered as fit for a specific purpose with optimized data collection requirements; multilateral wells, coiled tubing, through-tubing rotary drilling and under-balanced drilling.
  • "Smart" wells with downhole selective flow control, multiphase pumping and measures to assure well and pipeline flow.
  • Improvements in riser systems and further development of FPSO technology -- seven out of 32 new developments in the UK North Sea are produced via FPSO.

Field regeneration is another strategy many operators in the North Sea are using to boost recoveries from older fields.

"Many fields in the core areas of the North Sea are beyond their production plateau," Brooks said. "However, they remain valuable assets to operators prepared to see them as an opportunity by applying a strategy of targeted investment and cost reduction."

Rich Opportunities

The United Kingdom's Southern Gas Basin has significant remaining potential of up to 20 trillion cubic feet of gas. The entire province is linked to one of the world's fastest growing markets for natural gas.

Major proven plays in the Southern Gas Basin include the Lower Permian Rotliegend aeolian sandstones beneath an Upper Permian regional salt seal and an under-explored but potentially major play in Carboniferous sandstones sourced by juxtaposed coal measures and oil shales that are found in the basin center and along the margins.

The most exciting UK region for elephant-seeking majors is the Atlantic Margin with a largely unexplored group of basins with significant potential for multiple plays, Brooks said.

This area northwest of Britain includes the Faroe-Shetland Basin, with parts of the virtually unexplored Rockall Trough; the Hatton Basin; and the Hatton Continental Margin.

Water depths in some of these areas locally exceed two kilometers. "Tertiary inversion structures are regionally widespread, presenting multiple opportunities for structural entrapment," Brooks said. "Late Jurassic, organic-rich basinal-marine mudstones -- particularly the world class Kimmeridge Clay -- are the principal oil-prone source rocks in the Faroe-Shetland Basin, but they have not been proven yet in the Rockall Trough and adjacent Rockall Plateau.

"Rich oil-prone Middle Jurassic source rocks also occur in the Atlantic Margin province," he continued. "Oil in the Foinaven and Schiehallion fields can be correlated to these sources.

"The potential for a viable petroleum system in the Rockall Trough and the adjacent Rockall Plateau is being evaluated by current drilling -- the last truly frontier acreage in the UK designated waters."

To date the Faroe-Shetland Basin has been the primary focus of exploration along the Atlantic Margin. In 1992 Foinaven and Schiehallion were discovered and contain estimated reserves of 252 and 586 million barrels of oil respectively. Both fields are using floating production systems with offshore loading since there is no existing infrastructure in the region.

Much of the acreage along the axis and in the eastern part of the Faroe-Shetland Basin is currently licensed. An agreement between the UK and the Faroes last year defining the boundary of the basin's western part should provide a major stimulus to exploration because of the proximity of the newly designated acreage to proven hydrocarbon systems at Foinaven and Schiehallion.

Brooks said more than 80 percent of the Rockall Trough has never been licensed for exploration, although some acreage was awarded in a 1997 UK licensing round.

A considerable amount of new 2-D and 3-D seismic data has been acquired in the region and four wells have already been drilled on the licensing round acreage. Results from these wells will not be released for five years from date of completion.

Airborne/satellite detected seeps and other hydrocarbon indicators also have been noted in the Rockall Trough. This frontier region should be a major focus in the future.

The United Kingdom is currently considering its 19th offshore licensing round, which aims to include the newly designated, highly attractive White Zone between the Shetland and Faroes Islands -- the subject of an extensive environmental survey.

"The timing and extent of any license award in the round will depend upon the consideration and application of the EU Habitats Directive," Brooks said, "as well as the results of public consultation."

But the bottom line, he said, is plain to see:

"There is still a great deal of opportunity in the UK producing provinces and frontier regions," he said. "However, it will take 21st century techniques and ideas to find 21st century oil."

wtfczzdzdczddyvscudcbdcattxux

You may also be interested in ...