Exploration key to North Sea

How to increase exploration drilling rates on the UK Continental Shelf forms the largest section in today’s Wood Review report (see http://www.oedigital.com/component/k2/item/5082-all-eyes-on-north-sea-oil for more). 

Better seismic, data sharing, and government support for underexplored or new plays could help turn around the UK industry’s exploration drilling slump, it advises.

But access to a limited number of rigs and high rates would also need to be addressed, the report, UKCS Maximising Recovery Review, says. 

According to the report, more than 360 exploration wells have been drilled on the UK Continental Shelf since 2000, leading to the discovery of 4.1billion boe. 

However, post 2008, exploration activity has fallen sharply, reaching a low of 14 wells in 2011, the report says. In 2013, 15 exploration wells were reported. 

“There has not been a significant (multi-hundred million boe) discovery for five years and a step change in exploration strategy and knowledge are required to unlock new resources,” it says. 

It says timing is critical, with infrastructure which could support new finds coming to the end of its commercial life. 

In a bid to “revitalize exploration,” thereby extending and maximizing the life of the UK North Sea, the report sets out a number of recommendations. A strong theme is access to geological information and the corresponding ability to evaluate new plays. 

The review lists a number of new and underexplored plays on the UKCS, but says companies are reluctant to tap them due to a lack of good seismic data and insufficient data sharing of existing data. 

New plays identified by the Exploration Task Force, create by industry/government body PILOT, are listed as:

West of Hebrides; Carboniferous, beneath the central North Sea, east Irish Sea, and southern North Sea; western Graben margin; fractured basement; sub-basalt and cretaceous sands; high CO2 gas, Triassic west of Shetland; English Channel and SW Approaches; Permian in the East Irish Sea.

The review recommends a new regulatory body should help to facilitate industry and seismic companies to carry out speculative seismic, particularly targeting new plays, which lack up-to-date seismic coverage, with financial support if necessary. “More high quality seismic coverage of new plays could be a game changer,” the review says.

It also proposes a new online, up-to-date, digital resource containing information about the prospectivity and geology of the UKCS. This would need to be available within 18 months, “if it is to have any near-term benefit,” the report says.

More should be done to enable the timely sharing of well and seismic and data, it says. It also points out that both industry and government fail to make the best use of the British Geological Survey (BGS).

According to the review, the industry also told the review the current fiscal regime failed to provide sufficient incentive to explore, particularly in less prospective and more technically challenging areas. Smaller players face difficulty accessing funding to cover exploration costs, and there is a shortage of rigs in the UKCS. The review noted the regimes in the Netherlands and Norway, which included state-ownership and incentives for companies without production, respectively.

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