Economic Report 2013

4. The UK’s Continental Shelf

Development of the UK Continental Shelf

smaller, old fields such as Argyll, which ceased production in 1992 and is now renamed Alma. The industry has threemain goals in the coming years. These are to: continue to explore for and make new discoveries, increase the rate of recovery from existing fields and extend the productive life of the existing infrastructure, all in a safe and environmentally responsible manner. Figure 4 overleaf shows that, as the UKCS has matured, the rate of discovering new resources has slowed, yet significant volumes continue to be found. Even since the turn of the century when production peaked, 4.1 billion boe of recoverable reserves have been discovered. These discoveries vary in size with some, such as the Buzzard field discovered in 2001, now believed to contain more than 700 million boe of recoverable reserves. However, finds such as Buzzard are rare and discoveries have typically been much smaller since 2000, with the median size being just ten million boe. The region to thewest of Shetland is the latest to be developed, with production only beginning in 1997. Already, seven fields of 100 million boe or more in size have been discovered; it is the area of the UKCS that is believed to have the most undeveloped resources. The gap between the volumes discovered and produced (see figure 4) has converged in recent years as production from the early, large fields continues, albeit at declining rates, and new discoveries are being developed with the benefit of the extensive infrastructure available throughout the North Sea.

In the 1960s, the discovery of natural gas in the southern North Sea (SNS) was the first step in the development of an offshore oil and gas industry in the UK. Over the past 45 years, 42 billion barrels of oil equivalent (boe) have been recovered from the UK’s Continental Shelf (UKCS). As a result of the early discoveries, production of gas began in 1967 from the West Sole field and other gas resources were developed rapidly in the late 1960s and early 1970s, with various large fields such as Leman, Indefatigable and Hewett being quickly brought on-stream. It was not until December 1969 that oil was discovered further north in the central North Sea (CNS) and shortly afterwards in the northern North Sea (NNS). The first oil was produced from the Argyll field in June 1975. Large, iconic oil fields such as Forties (also in 1975), Brent and Beryl (1976), and Ninian (1978) commenced production over the next few years. After the first exploration successes, the ensuing surge in activity led to more than 25 billion boe being discovered by the mid-1970s and, to date, almost 55 billion boe have been discovered in more than 400 fields across the UKCS. Just under 300 of these are in production today, including thefirst,West Sole, leaving about 100 not yet developed, some of which may never be so for technical and commercial reasons. Whilst it is anticipated that production from the Brent field will cease in about the middle of this decade, many of these early large fields remain in production and there are even plans afoot to redevelop

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ECONOMIC REPORT 2013