Investment needed to move resources to reserves on UKCS

OE Staff Oct 31, 2017

The UK’s remaining petroleum reserves could sustain offshore production for at least the next 20 years and beyond, if additional undeveloped resources can be matured, says the UK's Oil and Gas Authority’s (OGA).

In a report “UK Oil and Gas: Reserves and Resources,” published today, it says that overall remaining recoverable reserves and resources range between 10-20 billion boe.

To date, about 43.5 billion boe has been produced from the UK and UK Continental Shelf (UKCS). The OGA estimates that UK reserves are approximately 5.7 billion boe (probable) and these alone, based on current production forecasts and not taking into account potential future exploration successes, have the capacity to sustain production for at least the next two decades.

However, this number could be increased by maturing the UK’s "considerable contingent resources," says the OGA. The regulatory body estimates that there are 7.4 billion boe of proved undeveloped resources. Much of this is in mature developed areas and under consideration for development. Developing it would require "substantial investment" in new field developments and incremental projects, the OGA says.

To achieve a reserves replacement of 25% over the next five years at an average unit development cost of £12/boe would require some £9 billion of investment, says the report.

But, the report says replacement of proven and probable reserves remains a concern. In 2016 about 600 MMboe were produced, but only 80 MMboe of contingent resources were matured to reserves.

Exploration success in 2016 helped add 210 MMboe to the contingent resources. The OGA’s current estimate of prospective (undiscovered) resources is 6 billion boe, with a range from 1.9 billion boe (lower estimate) to 9.2 billion boe (upper estimate).

"Taking account of this range of possibilities for prospective resources, together with the range of discovered reserves and contingent resources shown in the report, the current best estimate of remaining recoverable hydrocarbon resources from the UKCS is in the range 10 to 20 billion boe," the OGA says.

The report also includes new information on the UK’s contingent resource levels in producing fields, which presents a significant opportunity for the continued development of the UK’s petroleum resources. These data, previously not reported, were identified through the UKCS Asset Stewardship Survey and collected for the first time from oil and gas operators in 2016.

OGA’s operations director Gunther Newcombe said: “The UKCS is a world class petroleum province with 10 to 20 billion barrels of remaining discovered and undiscovered potential. The OGA has an important role in helping to steward this resource base, revitalize exploration and maximise economic recovery, working closely with industry and government. Future success of the basin requires attracting additional investment, implementing technology and company collaboration on new and existing developments.”