UK offshore drilling still in decline

Drilling activity offshore the UK remains depressed, according to Oil & Gas UK’s 2018 Economic Report.

Offshore staff

LONDON – Drilling activity offshore the UK remains depressed, according to Oil & Gas UK’s 2018 Economic Report.

During the first half of the year, 41 development wells were drilled, six fewer than in the corresponding period in 2017.

The dip was due to reduced infill drilling on existing fields and fewer wells in greenfield projects, the latter a consequence of fewer new developments being sanctioned, but also the smaller size of the newer fields.

And scarcity of capital has meant that only the most competitive or profitable UK wells have been gone ahead.

According to the report, the decline in development drilling will ultimately mean lower production levels, as older wells are decommissioned faster than newer ones are drilled.

Between January and August, four exploration wells and five appraisal wells were spud offshore the UK, following a total of 23 wells in these categories in 2017. That represented a decline of more than 50% on numbers drilled five years previously.

However, despite the subdued activity, discovered volumes have increased off the UK over the past two years with more than 700 MMboe proven during 2016-17. This was virtually the same as the combined returns from programs during 2008-15.

This year’s successes include Siccar Point’s recent appraisal well of Hess’ Cambo oil discovery west of Shetland, and Apache’s 10-MMboeGarten discovery in the Beryl area of the UK central North Sea.

Total is reviewing results from its Glendronnach well west of Shetland; others to watch are Cairn’s Ekland, Zennor Petroleum’s Finlaggan appraisal well, andAzinor Catalyst’s Plantain exploration well.

Activity could pick up later this year, with Equinor set to drill the Pip and Bigfoot prospects and possibly appraising last year’s Verbier discovery in the central sector, thought to hold 25-150 MMboe.

Siccar Point will drill the Lyon gas prospect west of Shetland; Nexen plans exploration and appraisal of its Glengorm and Cragganmore prospects; Neptune Energy could drill close to its Cygnus field in the southern gas basin; Spirit Energy could drill the Andromeda prospect; and there may be further appraisal of Chevron’s West Wick discovery.

09/12/2018

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