Economic Report 2013

Figure 4: Cumulative Resources Discovered and Produced

However, there are still a significant number of discoveries which have taken a long time to be developed, either because of limitations in prevailing technologies, a lack of local infrastructure or marginal economics. Clair and Mariner are examples of fields that were first discovered in the late 1970s and early 1980s, but were not developed until more than two decades later, after new technologies became available. The dynamics of the UKCS in the early days of production were very different from today. Throughout the 1970s and 1980s, a small number of very large fields dominated UKCS production, whereas today’s production comes from a much larger number of fields, most of which are considerably smaller in size. Figure 5 demonstrates this effect for oil since production began in 1975. This is not unusual for a maturing oil and gas province. The biggest and easiest reservoirs are found anddeveloped first, with later and smaller discoveries often being tied back to existing infrastructure. While this is often an enabling factor because it makes the new field economic, it means that tie-backs are dependent on the performance of an older, host installation, thereby adding a degree of complexity to the operation. Much of the newer resources are to be found in high pressure high temperature (HPHT), heavy oil, and deep water fields. However, many of the technologies required to recover these resources are still under development. If technology continues to advance at the rate experienced over the last 40 years and if commodity prices remain high, the share of production from such demanding reservoirs is expected to increase in future. Targeted policies drive the pace of development

60

Resources Discovered Production

50

40

30

Billion boe

20

10

0

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Source:WoodMackenzie Source: Wood Macke ie

Figure 5: Oil Production by UKCS Field

1,000

900

800

200 Annual Oil Production (Million boe ) 300 400 500 600 700

100

0

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Source: DECC Source: DECC

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ECONOMIC REPORT 2013