Business Outlook 2018


Nevertheless, discovered volumes are still well below the current UKCS annual production rate of around 600 million boe. Even if all reserves discovered last year are developed, the reserve replacement ratio will be around 0.6, which means we are producing from existing fields at almost twice the rate we are finding the next generation of new fields. Perhaps even more concerning is that the exploration and appraisal end of the business has been unable to keep pace with the progression of developments over the last decade, meaning the portfolio of economically viable development opportunities is getting smaller each year. Efforts need to be focused on replenishing the pool of development prospects through both exploration success and improving the commercial viability of existing undeveloped discoveries by deploying technology and considering new development models. Without this, even the most competitive regime in the world will not be able to attract investment. • The first 500 wells – the early stages of exploration in the basin were characterised by high impact, highly successful drillingwithmajor fields, such as Brent and Forties, discovered. Around 31 billion boewere discovered from these wells (more than 70 per cent of the UKCS’ total produced reserves), with average volumes per well of around 73 million boe. • 500-2,000 wells – this is the longest period of drilling between 1976 and 1996 typified by steady-state exploration – the industry was still regularly finding multi-hundred million boe fields, although there were fewer major discoveries. Around 14 billion boe (in the region of ten million boe per well) were discovered from these wells. • The last 500 wells – these wells have generally resulted in relatively small volumes being discovered (less than five billion boe in total and less than nine million boe per well), signalling the increasing maturity of the basin. It is particularly important industry works to maximise the value of these ‘small pool’ opportunities, which often require a campaign approach to be commercially developed. The creaming curve of cumulative volumes discovered by wells drilled, shown in Figure 27, identifies three distinct periods of drilling success across the approximately 2,500 exploration wells drilled on the UKCS:

Figure 27: Cumulative Volumes Discovered on the UKCS







Cumulative Volumes Discovered (Billion boe)








Cumulative Wells Drilled

Source: Oil & Gas UK, OGA, Wood Mackenzie


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