Good times drilling in the North Sea. So 1995. Or is it?
The majority of us will say check out last year’s figures – only 13 exploratory wells were drilled in 2015. As energyvoice.com put it – “Exploration in British waters has absolutely crashed and is now at its worst every in the entire history of our still strategically vital offshore oil and gas industry.”
But that was before the closure of the latest government licensing rounds. Keen observers (they do say the geeks will inherit the Earth) noticed that for the first time in over twenty years the recent offshore licensing offers in the North Sea concerned what’s described as “frontier areas”.
And guess what? Be still our beating hearts. It was “really positive”. 24 companies applied for licenses covering 113 blocks – BP alone made 29 applications. Nick Richardson, head of exploration and new ventures at the OGA said, “It is not much use comparing this to the previous round because in those we tries to target all acreage in the UKCS but here we have been much more targeted in what we have offered.”
He’s talking about the east Shetland Platform and the Rockall Trough and Mid-North Sea High areas. These haven’t been ventured into much, not least because they don’t offer the prospective driller an easy time. In February 2000 the RSS Discovery – a British oceanographic research vessel came across the largest waves ever recorded by scientific instruments in the open ocean with a SWH of 18.5m – 61ft – and individual waves up to 29.1m – 95ft.
However these were all areas that a UK Government-funded seismic acquisition programme focused on last year. It cost £20m and for the first time was made available to industry, along with roughly 20,000km of reprocessed legacy data. The OGA said it “provided an openly available, geophysical dataset allowing companies to identify and target a range of opportunities.”
Almost 9000km of full-fold seismic in the Rockall Trough and more than 10000km in the Mid-North Sea High were acquired before being published in a total of around 1200 blocks under the Open Government licence in March.
These programmes – part of the Innovate License concept- were proclaimed by the OGA to be critical in its plan to revitalise the flagging exploration of the UKCS. Licensees will be able to work with the regulator to work with the oGA to design “an optimal work programme – more appropriate phasing of activity, rental frees and competency tests and implements a stage-gate process for better monitoring of progress than the previous licensing regime.”
It paid off. The packages were downloaded more than 3000 times and companies saw something they liked. OGA CEO Andy Samuel said: “Despite the difficult climate, industry has responded strongly to our offer, using analysis and insights to identify new prospects and submit high quality applications on blocks that did not attract interest in recent licensing rounds. This confirms the high remaining potential in the UKCS’ frontier areas.”
Baroness Neville-Rolfe, Minister of State at the Department for Business, Energy and Industrial Strategy, said: “I welcome these new opportunities for our important oil and gas industry and the associated supply chain. The £20m seismic campaign funded by this government has highlighted more of the opportunities that are still out there in the UK continental shelf. We now look forward to companies taking advantage of these newly discovered sites and all the potential that they offer.”
And this is only the start. An additional £20 million of government cash funded a subsequent seismic programme completed earlier this month, focusing on waters off south-west Britain and the East Shetland region, with the data to be used as the basis of the UK’s 31st Frontier Licensing Round, due in 2018. If one thing is true about this industry, it’s that you can always expect the unexpected.