North Sea Body Says 22 Projects in the Pipeline

North Sea operators plan to progress 22 projects in the coming years, which, subject to robust emissions checks, would target 1.5 billion barrels, the North Sea Transition Authority (NSTA) said in a statement posted on its site recently.

In the statement, the NSTA noted that seven projects capable of producing almost 100 million barrels, and requiring about $1.3 billion (GBP 1.1 billion) of expenditure, have been approved by the NSTA since the start of last year, and highlighted that these “can significantly boost the UK’s security of supply as we transition, once production starts up”.

The figures, which the NSTA said highlight the scale of remaining potential in the North Sea, were presented to managing directors of the 22 largest North Sea operators at the annual Tier Zero performance review meeting, the organization highlighted. In its statement, the NSTA noted that major North Sea energy operators had met to discuss future opportunities and get clear messages on energy security, driving down emissions, and the importance of accelerating the transition.

“At last year’s Tier Zero, the NSTA challenged operators to get their production efficiency back on track following a drop of seven percentage points to 73 percent in 2021 amid widespread maintenance shutdowns,” the NSTA said in an organization statement.

“Encouragingly, production efficiency, which indicates how well companies are using their assets, went up to 78 percent in 2022. The NSTA will continue working with operators to help them restore it to the longstanding target of 80 percent,” it added. 

“Industry was praised for recent emissions reductions, including from flaring, which has been halved since 2018,” the NSTA continued.

The NSTA noted that these reductions are expected to continue, “with companies highlighting dozens of plans to improve energy efficiency and reduce flaring”. It added, however, that operators must do more if they are to meet the NSTA’s expectation of eliminating routine flaring and venting by 2030.

“Operators must also invest in powering their platforms with clean electricity to meet and surpass the North Sea Transition Deal target of lowering overall production emissions by 50 percent by 2030 and preserve their social license to operate,” the NSTA stated.  

Repurposing, Carbon Storage Awards

In addition, options to repurpose and reuse oil and gas infrastructure for low-carbon projects including hydrogen and carbon storage are being identified, the NSTA announced. The organization also said it will soon give more impetus to the transition by announcing the awards for the UK’s first ever carbon storage licensing round, which it highlighted received 26 bids from 19 companies.

“The North Sea boasts a vast array of oil and gas, wind and storage resources which can secure the UK’s supply of cleanly-produced energy, rapidly reduce its greenhouse gas emissions, and support hundreds of thousands of skilled jobs,” NSTA Chief Executive Stuart Payne said in an organization statement.

“The NSTA will lead the way on efforts to integrate these resources, optimizing their enormous potential,” he added.

Rigzone has contacted industry body Offshore Energies UK (OEUK) for comment on the NSTA’s latest update. At the time of writing, Rigzone has not yet received a response.

In April 2022, the NSTA noted that the annual performance review for the UK’s top producers highlighted 33 new projects targeting 1.3 billion barrels of oil and gas, which the organization said, “will significantly bolster the country’s energy security”.

“A total of 890 million barrels of those resources could be sanctioned as early as next year and the North Sea Transition Authority expects operators to rapidly deliver projects, in line with its effective net zero test, in the interest of UK supply resilience,” the NSTA said in an organization statement at the time.

NSTA Moves to Speed Up North Sea Oil, Gas Output

In a statement posted on its site back in March, the NSTA announced that it had moved to speed up North Sea oil and gas production by proposing the removal of barriers to investment.

“The NSTA is determined to assist industry in its role of ensuring security of domestic energy supply and has opened a consultation on new guidance which aims to streamline the buying and selling of assets,” the NSTA said in an organization statement at the time.

“Operators and licensees worried about transaction delays which can damage working relationships, increase costs and hold up operational and strategic decisions asked the NSTA to look into the situation,” it added.

“The NSTA learned of licensees and potential investors who have been frustrated by challenges they have encountered either during, or because of, license assignments,” it continued. 

In the statement, the NSTA noted that concerns relate to matters such as operational activities and capital projects being slowed, blocked transactions having a knock-on effect on North Sea production, concerns over decommissioning cost exposure delaying deals, and excessive co-venturer requirements tying-up capital that could be used productively elsewhere in the basin. 

“The consultation will address these and other related issues,” the NSTA said in the statement.

“It will allow licensees and investors to share their thoughts on matters including how best to strike a balance between market liquidity and preserving investor confidence, the role of self-regulation and what the NSTA guidance on license assignments should include,” it added.

The consultation will be open until May 23. New guidance is expected to be published later this year.

“The UKCS has a rich history of successfully welcoming new investors to the basin,” NSTA Director of Regulation Jane de Lozey said in an organization statement at the time.

“These investors have brought new capital, new ideas and new vigor; the NSTA wants this to continue to support the UK’s need for energy security,” de Lozey added.

“Some transactions have been delayed or even jeopardized by buyers and sellers failing to engage joint venture partners early enough and the new guidance will provide clear actions to take and when to take them, to ensure that production is maximized,” de Lozey continued.

To contact the author, email andreas.exarheas@rigzone.com