ABERDEEN, UK – Only two new offshore projects have been approved on the UK continental shelf (UKCS) this year, according to analyst Westwood Global Energy Group.
The combination of new projects coming off plateau and decline from mature fields means that total UK offshore production is set to fall rapidly in the early 2020s, claimed Yvonne Telford, Westwood’s senior analyst, Northwest Europe Research.
Westwood estimates that there are 8.5 Bboe of resources spread across 496 unsanctioned discoveries on the UKCS, although a total of only 750 MMboe from 32 of these (9% of the entire discovered pool) appears to be commercial, based on a $60/bbl oil price.
Technical or commercial innovations could add a further 1.5 Bboe to this total, with Rosebank andCambo, fractured basement discoveries on the Rona Ridge west of Shetland, and the high-pressure/high-temperature Jackdaw discovery in the UK central North Sea, most likely to go forward for development.
Rosebank, Cambo, and Jackdaw were all in the planning or concept development stages in 2013 but became uneconomic due to the subsequent oil price drop.
Telford estimated the Chevron-operated Rosebank and the Shell-led Jackdaw’s combined resources at 430 MMboe. The results of the tender for an FPSO for Rosebank, due to be submitted by end-March 2018, will be key in determining the project’s commercial viability, because the Tertiary, intra-Basalt clastic reservoir is challenging, likewise the economics for a deepwater FPSO in the harsh conditions west of Shetland.
Shell has recently indicated that it is assessing the commercial and technical viability of its development opportunities in the UK, Telford added.
Companies and the government will need to look at how they can deliver commercial resources from the suite of discoveredsmall pools and bring through the large, but more technically challenging discoveries, she concluded.