Investors closing in on heavy oil in UK sector far north
Drilling techniques could increase yield from complex fields
Jeremy Beckman, Editor, Europe
Heavy oil suddenly is hot property in the UK North Sea. Interest is keenest in Quadrant 9 blocks in the far north, where a hub could soon emerge serving four long-neglected fields.
According to Britain’s Department for Business, Enterprise and Regulatory Reform (BERR), there are 19 heavy oil discoveries throughout the UK shelf, with in-place reserves totaling 9 Bbbl. Many were discovered in the 1970s and ’80s, but none were developed until Kerr McGee’s Gryphon field came onstream in 1993.
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North Sea heavy oil overview.
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Currently there are six active heavy oil fields collectively generating 150,000 b/d, equivalent to 10% of the UK’s crude production. Of these, the most prolific are Chevron’s Captain and Alba in the central North Sea, ranked respectively third and eighth in the UK output league.
The new band of investors is led by StatoilHydro, operator of Mariner in block 9/11c and Bressay in two blocks adjoining Quadrant 9’s northern border. Both potentially hold the largest undeveloped resources on the shelf, with combined in-place oil of over 2 Bbbl.
On the UKCS, heavy oil is defined as crude with gravity below 22º API and viscosity above 5 centipoise (cP). It is less mobile within the reservoir than lighter crudes and therefore harder to extract. But horizontal wells and smarter completions, with longer-lasting electric and hydraulic submersible pumps, are transforming the economics of these fields.
Kraken
Of the various companies weighing production timetables, Nautical aims to be first out of the blocks. Assuming a planned appraisal well on Kraken this fall meets expectations, development could start late next year.
Occidental discovered the field in block 9/2b in 1985 – unintentionally, according to Nautical’s CEO Steve Jenkins. “This was a Viking graben fringe play, where lots of wells had been drilled through thin Jurassic sands targeting light Brent-quality crude. Occidental was hoping for the same, but instead found heavier crude in the Tertiary and Cretaceous intervals which flowed at 200 b/d.”
After Occidental relinquished the block, the industry ignored Kraken until 1998, when CGG acquired speculative 3D seismic across 9/2b and neighboring blocks, which included Bentley, Bressay, Mariner, and other smaller accumulations. All were made available under the UK’s 21st Offshore Licensing Round in October 2003.
Previously, says Jenkins, “heavy oil discoveries and exploration upside in this part of the North Sea had been neglected, due to the fact that there were easier pickings elsewhere with Brent-type crude, and also because of the historically variable discounts on heavy oil. But that situation is now narrowing.
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Volume 68 Issue 8
August 2008
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