Oil & Gas UK Activity Survey 2016

ACTIVITY SURVEY 2016

Figure 16 shows a broader picture of how the UKCS’ reserve base has changed over time. It reveals that the reserves base consistently grew between 2009 and 2012 before falling in each of the last four years as a lack of exploration activity curtailed the rate of new volumes being discovered. Sanctioned reserves have tracked a similar trend as maturation through to sanction also slowed following the wave of big field approvals at the start of the decade. However, in 2015, the volume of sanctioned reserves was upheld by the approval of new projects, particularly large developments such as Culzean and Glenlivet/Edradour. The total volume in the ‘probable’ and ‘possible’ categories, meanwhile, has not been this small since 2007. As outlined, prevailing economic conditions have led companies to reassess their portfolio of future developments and, at this time, only the best and most material projects are deemed to be potentially viable opportunities.

Figure 16: Reserves by Probability of Proceeding

14

Sanctioned Probable Possible

12

10

8

6

4

2

0 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Total Reserves in Company Plans (Billion boe)

Source: Oil & Gas UK

Resource Comparison by Region

While resource projections should be treated with even greater caution at a time of price uncertainty, Figure 17 opposite estimates the potential of each geographic region of the UKCS.

The distribution among these regions has changed little over the last 12 months, with the CNS area remaining the largest resource base. Of the ten billion boe in the CNS, just over 3.5 billion boe are currently within company plans, over three billion boe of which are already sanctioned. The materiality of developments typically found in this area means it is the only region of the UKCS that has not suffered a fall in its resource base over the last 12 months. On the other hand, the resource base in the NNS region has declined the most. Reserves within company plans in the area fell by almost 15 per cent to just under two billion boe. This is because the region has the highest cost base on the UKCS and faces severe operational challenges.

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