ABERDEEN, UK -- Conflicting patterns are emerging in the UK offshore drilling sector, according to speakers at one keynote session of Offshore Europe 2013.
Mike Tholan, Economics and Commercial director at Oil and Gas UK, opened the debate on Planning for Long Term North Sea Drilling. Despite rising rig rates, high oil prices and record investment in new projects, production from the UK has fallen by 16-17% over the last two years, he said, and the number of development wells drilling on UK fields is less than half what it was a decade ago.
More activity is needed on the big mature fields which still hold large volumes of untapped reserves, he said. “Unless we get more drilling here, we won't get the most of out what's left in the sector.”
Britain's government responded to the industry's call for help by introducing the Brownfield Tax allowance last year, and is now looking for operators to respond. However, there still are barriers, he said, one being the need to invest in old platform drilling facilities to ensure that they operate as reliably as they did 10 years ago.
Another is the high cost and risk of drilling the myriad targets of small accumulations close to the platforms, particularly if a dry hole results.
Mark Burns, COO of Ensco, saw more positives. West of Shetland there has been a trend towards more advanced subsea completions and subsea architecture, he said, while the Norwegian government is pressing for measures to halt the production decline from the Norwegian North Sea. This is beneficial for both drilling contractors and service companies, Burns said.
In the southern North Sea, he added, jackup activity for gas drilling remains strong, with longer-term rig contracts. “We are attracting more rigs in this region going two to four years out.”
In the central North Sea, some newbuild harsh environment jackups are on their way to new field developments, while there is a growing need for harsh environment semis west of Shetland.
One of the bigger challenges, he suggested, is how to address the ever-growing competition for experienced drilling personnel. “If you promote personnel from within and operate training programs, your retention rates are better,” he said. “But with the number of newbuild rigs being delivered, demand for personnel will only escalate.”