Business Outlook 2019

BUSINESS OUTLOOK 2019

Figure 11: UKCS 2019 Exploration Opportunities Under Consideration 8

Lyon Blackrock Warwick

Alwyn East Chimera Bigfoot Pip Goose

Lifjellet Isabella Andromeda Ossian-Darach

It is also crucial that industry maintains a focus on near-field exploration. These opportunities can unlock significant value, while also providing much-needed additional throughput to improve the ongoing economic viability and life of existing infrastructure. The strategy adopted by Apache in the Beryl area is a good example of maximising near field potential, with four discoveries made in the area since 2015. Many of the opportunities planned for 2019 are near to existing hubs, including Total E&P’s Alwyn East prospect in the northern North Sea, and Bigfoot, which could make use of Equinor’s Mariner infrastructure. Although near-field opportunities often target relatively small volumes, the value of the UKCS can make these opportunities more commercially attractive in the UK compared with other basins. Competitive fiscal terms, good access to infrastructure and improved costs mean that these smaller volume projects are more likely to be developed here. Near-field projects can provide important capital flexibility, by allowing for quicker payback in terms of return on investment. Discoveries made in the last five years on the UKCS which have been, or are being developed have reached first production in an average of less than four years and in some cases significantly less time; Apache’s Garten field, for example, reached production just eight months after discovery. Opportunities such as these are important aspects of exploration portfolios, helping to bring a balance alongside more frontier projects which carry higher associated risks and capital exposure.

8 Please note that this list is not exhaustive and not all wells may be drilled. Some prospects may require more than a single exploration well.

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