LONDON– About half of the UK’s 3 Bboe of technically recoverable stranded resource is potentially economic at $50/bbl, according to a new report from Wood Mackenzie.
In the report, “The Big Prize in the UK’s Small Pools,” the analyst claims that developing the resource would require $18 billion of development capex, and has the potential to generate $10 billion in value to the partners.
At current exploration rates, it would take 14 years and 500 wells to discover volumes of a similar size. In an ultra-mature region, this level of discovered resource can no longer be ignored. As well as providing much-needed new investment for the sector, small pools could provide vital volumes to existing infrastructure hubs.
TheUK’s small pools do, however, bring many challenges, including a lack of individual materiality, and no single obvious peer group to develop them.
According to the report, subsea technology is expected to be strongly featured in the development of small pools. As a result, the analyst examined the potential impact of the new “Tie-back of the Future” concept, which is currently being piloted by the Oil and Gas Technology Centre.
The report found that the “Tie-back of the Future” could improve potentially economic resource by 400 MMboe (27%) and add $4 billion of value. Also, the OGTC’s concept could lead to a 50% reduction in subsea facility and abandonment costs, and a 50% reduction in time from FID to first oil.