ECONOMIC REPORT 2013
28
Licensing and Drilling
a) Exploration
An active exploration market remains crucial
to the success of the UKCS; without it, there
can be no long-term future for oil and gas
production. Since 2000, 358 exploration wells
have been drilled, resulting in 4.1 billion boe
of reserves being discovered with a median
discovery size of ten million boe.
Despite the high volume of reserves already
recovered, the UKCS still has substantial oil
and gas resources and exploration potential.
Oil & Gas UK believes that between three and
nine billion boe have yet to be discovered (see
figure 7 on page 18). At the current rate of
drilling, it is estimated that it will take some 20
years and250 to500wells toexplore for andfind
these resources, the recovery of which will rely,
to a large extent, on the availability of
existing infrastructure.
Exploration and appraisal (E&A) drilling
increased overall in 2012, with 24 exploration
(14 in 2011) and 19 appraisal (16 in 2011) wells
being drilled, together costing £1.7 billion.
These numbers exclude sidetracks of which
there were two exploration and six appraisal
wells in 2012. Despite this increase in E&A
drilling, the industry is struggling to reach the
rates of 2007 and 2008.
Exploration drilling activity, averaged over
the past four years, has been the lowest
for a decade, with 2011 being notably low.
This can partly be blamed on the economic
crisis and limited access to finance for smaller
exploration companies.
Figure 19: Forecast Distribution of Yet-to-Find Resources
13%
48%
9%
22%
9%
NNS
CNS
SNS, Irish Sea and Celtic Basin
West of Shetland
West of Scotland
Source: DECC
