Measures Recommended For UK North Sea O&G Production Increase

Oil and gas production in the UK North Sea could be boosted in the coming years through a series of measures recommended by the North Sea Transition Authority (NSTA).

The recommendations were made in the latest Wells Insight Report, which found that drilling activity remained low in 2021, as the industry continued its recovery from the impact of the COVID-19 pandemic.

Pre-pandemic drilling operations were taking place in 141 wells in 2019. But last year drilling operations began on 66 wells, including five exploration, five appraisal, and 56 development wells, similar to levels recorded in 2020. Production totaled 480 million barrels in 2021, compared with 600 million in 2019.

However, a focus on second wellbores, the new licensing round, and maintaining existing wells could all help boost production in years to come, according to the new report.

“Amid the energy crisis, it is vital that the North Sea industry works quickly to secure additional supplies of oil and gas, produced as cleanly as possible. That means drilling more new wells and restoring those which can be repaired. The NSTA is working with the industry on several fronts to support this work. Part of that involves sharing data, such as those presented in this report, and benchmarking to keep the industry better informed on wells performance and priority areas,” NSTA Head of Technology Carlo Procaccini said.

About half of the 66 wells targeted near-infrastructure opportunities with a quick turnaround time. One discovery made last year in a well-developed area was brought on-stream in early 2022, well below the average discovery to production timescale of five years.

As further evidence of this focus on faster development, 30% of the wells were geological sidetracks – a secondary wellbore drilled away from the original hole to reach a new target – which can typically be drilled more quickly and at a lower cost than a new well from the surface.

More recent signs suggest that drilling will pick up in the medium term. Commodity prices have stayed consistently high this year, accelerating development plans of 30 projects which target 1.5 billion barrels and are currently progressing towards consent decisions. The recent launch of the 33rd offshore oil and gas licensing round, the first since 2019, should spur exploration drilling.

Due to a reduction in well maintenance in 2021, the performance of the existing wellstock has further declined, with 34% of total active wells on the UKCS now shut in or plugged.

The NSTA wants to see more well interventions to reactivate production. Many types of intervention cost just £5-10 per barrel, which should make it an attractive option for industry, particularly when oil and gas prices are high.

Disappointingly, intervention work was carried out on just 15% of wells in 2021, down from 17% in 2020, resulting in the addition of only 36.2 million barrels of production, well below the average of 50 million added in previous years.

Some operators are facing logistical constraints on their platforms and/or with supply chain availability. In addition, subsea well intervention remains stubbornly low, as fewer than 10% of subsea wells are being surveyed and/or receiving maintenance work each year.

To sustain domestic production and bolster the UK’s energy security, the NSTA is actively working with operators on ways to accelerate exploration and development plans and perform more maintenance and intervention work on the existing well stock.

To contact the author, email bojan.lepic@rigzone.com