A total of 14 startups with a combined production of 230,000 bpd are expected to come on stream in the UK section of the North Sea this year, the highest yearly new oil output in ten years, Bloomberg reported on Monday, citing data by energy consultancy Wood Mackenzie.
The projects are the result of the high investments in this mature basin that were made before the 2014 oil price crash. The outlook beyond 2018 is not nearly as bright due to the underinvestment in new projects following the slump in oil prices, according to WoodMac.
“It’s really the fruits of a very high level of investment in the 2010 to 2014 period,” Mhairidh Evans, a senior research analyst for North Sea upstream at Wood Mackenzie, told Bloomberg over the phone, commenting on this year’s expected jump in new startup production.
Next year, the UK North Sea’s average oil and gas production is forecast at some 1.9 million barrels equivalent of oil and gas, with the output from this year’s projects representing 12 percent of the total production, according to Wood Mackenzie.
So far this year, 8 oil and gas fields in the UK North Sea have started production, which are estimated to add a combined 140,000 barrels of oil equivalent per day (boed) of production, Bloomberg reports, quoting WoodMac data.
The most recent startup was Total’s Edradour & Glenlivet gas and condensate fields in the West of Shetland area, which will be adding production capacity of up to 56,000 boed to the French company’s North Sea production.
In May, BP produced its first oil from the Quad 204 project in the west of Shetland, following a multi-billion redevelopment. Production from the project is expected to ramp up through the remainder of this year to a plateau level of 130,000 boed. BP plans to double its UK North Sea production to 200,000 boed by 2020. The UK oil major is also expecting next year first oil from Clair Ridge, the second phase development of the Clair field. London-listed Premier Oil is on schedule for first oil at Catcher this year.
But these startups were the result of pre-2014 investments, and new production beyond 2018 will not be as high, due to companies deferring or repurposing investments at the height of the oil price crash.
“Really 2017 is the last year of that tranche of projects”, WoodMac’s Evans told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…