Economic Report 2016 - Oil & Gas UK

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• Exploration Conference – Oil & Gas UK’s annual Exploration Conference
was held in February 2016 with over 170 delegates attending. With a
view to sharing best practice, delegates heard about the successes and
challenges of exploration in the North Sea and Atlantic Margin, as well as
the recent advances in seismic technology.
• Well failure analysis study – as part of the industry’s 21st Century
Exploration RoadMap project, findings were released earlier this year from
the OGA’s well failure analysis study in the central North Sea (CNS) and
Moray Firth regions20 . The work was carried out to improve exploration
success, with detailed analyses and interpreted reasons for the failure of
98 wells drilled over the last ten years so that lessons could be learnt.
• 29th Licensing Round – The OGA has launched the 29th Offshore Licensing
Round with more than 1,200 blocks available to support the objective
of MER UK. A new concept known as the Innovate Licence has also been
developed by the MER UK Exploration Board so that licencees can work
with the OGA to design an optimal work programme with better monitoring
of progress than the previous licensing regime.
• Palaeozoic study – a joint industry-government funded study carried
out by the British Geological Society has examined the Palaeozoic rock
formation in the CNS, Irish Sea and Orcadian Basin to improve geological
understanding. The information has been shared with the project sponsors
and will become more widely available after the 29th Licensing Round.
• Targeting drilling cost reductions – Oil & Gas UK’s well cost reduction group is investigating means to use
technology to reduce well construction costs by up to 50 per cent.
• Subsurface study contracts – in August 2016, the OGA awarded four contracts with a combined value of more
than £6 million over three years for surface and subsurface studies to improve geotechnical understanding.
All of these initiatives are of utmost importance and are progressing well, but further work still needs to be done
to counter the difficulties that industry is currently experiencing in this area. Without an upturn in exploration
activity, much of the UKCS’ yet-to-find potential will not be accessed and even the low case will prove difficult
to achieve.
20 The Well Analysis study is available to download at
Concerted action
is being taken by
the government,
the regulator
and industry
to stimulate
exploration
and appraisal
and replenish
production with
new projects.