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The UK Continental Shelf holds 3.4 billion barrels of oil equivalent (boe) in around 350 unsanctioned discoveries, highlighting a significant development potential, the UK’s Oil and Gas Authority said in a study on Tuesday, but warned that challenges remain in making these finds economically attractive to develop.
Most of the deposits lie in “small pools”, that is, containing less than 50 million technically recoverable boe. Some of those small pools, however, are far from existing infrastructure and may need new technologies and stand-alone solutions to pump the oil and gas, the authority said.
A total of 155 of the pools along the UK Continental Shelf are unlicensed, the study found. In addition, ownership and operatorship are fragmented, and many operators operate just one or two pools in the UK’s North Sea.
Regarding the pools that can be tied to existing infrastructure, their economically viable development critically depends on cost reduction for tie-back and modifications to existing infrastructure. Regarding the pools that are far away from existing infrastructure, efficient technology would be needed to make them attractive for development, the authority’s study says. Some areas also pose technical challenges to recovering hydrocarbons, including heavy oil, high pressure, and low permeability.
Related: Saudi Oil Minister: Non-OPEC Producers Are Ready To Join Output Cut
Dr. Gordon Drummond, project director of the National Subsea Research Initiative (NSRI) that supported the study, said, “Following an extensive mapping exercise, we now know exactly where these small pools are located and what is required to unlock their potential. If the subsea industry can rise to the challenge of economically tapping into these pools, the North Sea could have a whole new lease of life.”
Tapping into these pools is currently easier said than done, as the North Sea is one of the most expensive development ventures for companies in this low-price environment.
Last month, the Scottish Government said that the value of Scotland’s oil and gas output - which accounted for 81 percent of the UK total production in 2015-2016 – plummeted by 23.5 percent as sustained low prices highlight the challenges that the industry is facing.
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…