Exploration lifts UK commercial reserves

UK offshore operators produced 850 MMboe in 2010 or 2.3 MMboe/d, according to the latest survey by industry group Oil & Gas UK.

Offshore staff

LONDON -- UK offshore operators produced 850 MMboe in 2010 or 2.3 MMboe/d, according to the latest survey by industry group Oil & Gas UK.

Current UK field development plans target total reserves of 11.6 Bboe, up 1.3 Bboe on the total one year ago. This is due to increased exploration and appraisal activity, particularly West of Shetland. Oil & Gas UK believes up to 24 Bboe still could be recovered from the UK continental shelf.

Last year, the association identified 62 exploration and appraisal (E&A) wells across the shelf compared with 65 in 2009, of which two-thirds were exploration wells. Around one in three wells was successful, adding 300-400 MMboe to UK reserves.

A similar number will likely be drilled this year, the association claims, incurring E&A spending of over £1.3 billion ($2.09 billion). Much of the increase will come from exploration drilling and seismic surveys.

There are also negatives. Unit operating costs in 2010 rose 10% on falling production, and the new discoveries were materially smaller than those found in less mature oil and gas provinces elsewhere.

UK operators also face rising decommissioning costs, with Oil & Gas UK predicting total outlay of £29 billion ($46.7 billion) over the next three decades, up 11% on last year’s forecast.

02/28/2011

More in Regional Reports