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The UK North Sea operators developments and discoveries

 

Industry and government bodies issued several major reports on the state of the UK Continental Shelf and its future and value, a major discovery was announced, and operators continued to strike deals about developments and drilling.  

At the end of January, China’s CNOOC and France’s Total announced a major gas and condensate discovery on the Glengorm prospect in the UK Central North Sea.

“Glengorm discovery demonstrates the great exploration potential of License P2215. We are looking forward to further appraisal,” said Xie Yuhong, Executive Vice President of CNOOC, which is the operator of the licence and holds a 50-percent stake.

“Following the recent Glendronach discovery, West of Shetland in the U.K., Glengorm is another great success for Total in the North Sea, with results at the top end of expectations and a high condensate yield in addition to the gas,” said Kevin McLachlan, Senior Vice President Exploration at Total, which holds a 25-percent working interest in the Glengorm discovery.

Results of Biggest Finds in the UKCS 

“Initial results show that Glengorm could be one of the biggest finds in the UKCS in recent years, possibly the biggest since the Culzean gas field was discovered eleven years ago,” according to Oil & Gas Authority (OGA) Chief Executive, Dr Andy Samuel.

Industry association Oil & Gas UK also welcomed the new major discovery, with Oil & Gas UK’s market intelligence manager Ross Dornan commenting:

“The location of the discovery, in the central North Sea, also provides a valuable opportunity to make use of the UKCS’ extensive infrastructure network. Coming so soon after the Glendronach discovery in September, Glengorm is a major milestone towards adding another generation of productive life to the UK North Sea and realising the ambition of Vision 2035.”

According to research firm Rystad Energy

According to research firm Rystad Energy, the Glengorm discovery, with recoverable resources estimated at around 250 million barrels of oil equivalent, is the largest discovery in the UK North Sea since Culzean in 2008. A discovery of this size highlights the exploration performance of the UKCS since 2016 and that discovery will likely be an industry hotspot for years, Rystad said.

“The proximity to infrastructure, the reported high quality reservoir and follow up potential all point to Glengorm becoming a large new field development on the UKCS,” said Rystad Energy senior analyst Sonya Boodoo.

In early February, the Scottish Affairs Committee recommended in a report that the best way for the UK Government to support the oil and gas industry in Scotland is to agree an ambitious sector deal.
“A well supported sector deal, backed by firm commitments from industry and government has the potential to deliver £110 billion for the UK economy between now and 2035, with Scotland being one of the main beneficiaries,” the report said.

The recommended sector deal should focus on maximising the recovery of the 10–20 billion barrels of oil and gas remaining in the UKCS; look for ways to cut decommissioning costs, export the sector’s expertise, technology, and know-how, including in subsea engineering and decommissioning, to other basins; help the industry cut its carbon footprint; and use the skills and technology of the sector to support the development of carbon capture technology.   

“The opportunities presented by an oil and gas sector deal for Scotland are too significant to be overlooked. The sector deal would both provide energy security for the UK for decades to come and support the industry to remain a global leader in energy production,” the report said.

Commenting on the findings of the Scottish Affairs Committee report, OGUK Chief Executive Deirdre Michie said:

“What is clear is that there is a recognition of our value and a collective will to realise the full potential of our industry. This is a solid founding block on which to realise Vision 2035, adding a generation of productive life to the UK Continental Shelf and expanding opportunities for our world class supply chain.”

Oil & Gas UK comment on Brexit

In the past month, Oil & Gas UK also commented on Brexit and the future of the UK oil and gas industry. According to the association’s research and input from members, the top priorities for the UK after Brexit, should include protecting the offshore industry from future EU regulatory changes; maintaining a strong voice in Europe; minimal friction between the UK and EU; protecting energy trading and the internal energy market; and protecting the operators’ licence to operate.

Oil & Gas UK also commented on the DNV GL Industry Outlook, which showed in late January that that confidence in the outlook of the UK oil and gas industry has increased significantly over the last two years.

“We have already seen the sector delivering improved performance, securing more project approvals in 2018 than in the last three years combined. Our challenge is to build on our successes to generate increased exploration activity,” said Oil & Gas UK’s Dornan.

January also saw the launch of a new global research decommissioning centre—the National Decommissioning Centre (NDC)—a partnership between the University of Aberdeen and Oil and Gas Technology Centre. The long-term £38-million partnership, part of the Aberdeen City Region Deal, will focus on reducing costs and extending field life.  

On the last day of January, OGA said it had launched the Supplementary 31st Offshore Licensing Round, presenting an exceptional opportunity for oil and gas companies to collaborate to maximise economic recovery of up to 300 million barrels of oil equivalent in the Greater Buchan Area.

Apart from government, industry, and agencies reports, operators in the UK North Sea also had a busy month of various deals at the start of the year through mid-February.

Equinor and Chevron completed in January their deal, under which the Norwegian firm bought Chevron’s 40-percent operated interest in the Rosebank project in the West of Shetland region.

Maritime Developments said that it had successfully completed a four-project North Sea campaign with TechnipFMC, which included installation and retrieval of umbilicals, jumpers, risers, and flowlines.  

Faroe Petroleum announcement 


Faroe Petroleum announced in mid-January the equity partnership with subsidiaries of Shell and Spirit Energy in the Edinburgh Area, containing the large Edinburgh prospect, which straddles the UK/Norway border in the Central North Sea at the south eastern end of the prolific Josephine Ridge area. Faroe’s preliminary estimates point that the Edinburgh prospect may have material volumes with potential for standalone development.

Energy logistics provider Peterson said on 21 January that it had been awarded a new long-term integrated logistics contract to service Repsol Sinopec Resources UK. Under the contract, Repsol Sinopec will be transitioning their marine and quayside operations to Aberdeen from Peterhead with integrated supply base, logistics, transport, and warehousing operations being provided from Peterson’s Aberdeen Operations Centre.
 
Wild Well Control, a provider of well control response, subsea and well control engineering and training services, announced in January the expansion of its Montrose facility at South Ferryden, UK.

4Subsea and Ashtead Technology Remarks

4Subsea and Ashtead Technology said on 23 January that they had entered a strategic partnership for global distribution of sensor technology to the oil and gas industry.

Under the deal, 4Subsea’s autonomous, retrofittable sensors will be available to the global oil and gas industry via Ashtead Technology, and 4Subsea will also explore utilising Ashtead’s acoustic sensors for further developing their services offering to the market. The partnership will work to support operators and vessel owners in reducing risk and operational cost.
 
Odfjell Drilling said on 29 January that BP had awarded it a contract for platform drilling and maintenance services on three of its platforms in the UK North Sea, as the supermajor will continue to use Odfjell Drilling’s platform drilling services on the UKCS.

Australia-listed Talon Petroleum said on 31 January that it had agreed to buy UK-based EnCounter Oil Limited as Talon continues to advance its strategy to build a compelling portfolio of UK North Sea opportunities.
 
On 4 February, floating production and subsea specialist Crondall Energy said that it was launching a study looking at pipeline coatings with the aim of advancing industry understanding of the potential flow assurance benefits of internal coatings. The study will be led by Crondall Energy’s in-house Flow Assurance team in Aberdeen and is a partnership with Heriot-Watt University, The Oil & Gas Technology Centre (OGTC), and The Oil & Gas Innovation Centre (OGIC).

Essar Oil UK Group of companies (Essar) announced in early February the acquisition of assets from BP—an equity stake in the UKOP pipeline, a share of the contractual joint venture (with Shell) which runs the Kingsbury Terminal, and a 100-percent interest in the Northampton Terminal.
 
Norwegian inspection, maintenance and repair (IMR) company WellConnection Group marked their entrance into the UK market by buying Peterhead-based Independent Oilfield Services (IOS).

Cluff Natural Resources said on 8 February that it entered into a binding, conditional farm-out agreement and a three-month exclusive option with Shell U.K. in relation to the company’s Southern North Sea Licences P2252 and P2437, respectively.

“We are particularly excited at the prospect of embarking on our partnership with Shell with both parties sharing a commitment to further development in the Southern North Sea,” Cluff’s Chief Executive Graham Swindells said.

Petrofac said on 11 February that it won a contract from Siccar Point Energy for Well Operator and Well Engineering Project Management services, including supply chain management, for Siccar Point’s operated assets West of Shetland. The contract is for three years, with options to extend, and is estimated to be worth up to US$95 million over the term.

On the same day, PD&MS said that it had won a two-year contract extension with Shell UK, thus extending its partnership through April 2021 and securing 50 full-time jobs.
 
On 12 February independent company RockRose Energy said that the production life of the Ross and Blake fields, in which it has a 30.82-percent interest, is being extended from 2024 to at least 2029, giving an incremental net 2P reserves of more than 4.2MMboe.   

“Overall, we remain focussed on continuing to invest in our portfolio to extend field life where possible and to explore options for further value accretive acquisitions,” said RockRose Executive Chairman Andrew Austin.

 

By Tsvetana Paraskova

Published: 21-02-2019
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