The Press and Journal (Aberdeen and Aberdeenshire)
Report shows opportunities for UK shelf
The Oil and Gas Authority’s (OGA) Well Insight report says “significant opportunities” remain in the basin, despite rising abandonment and a Covidrelated exploration slump.
The 2021 Well Insight report is the second published by the regulator, and aims to offer insight into the state of well activities across the UK Continental Shelf (UKCS).
The report shows that the number of exploration and appraisal (E&A) wells spudded has declined steadily to nine in 2020 – the lowest yearly total on record since the 1960s – from 29 in 2019.
Covid-related disruptions also saw the cancellation and/or deferment of 10 wells planned last year.
However, success rates have improved, and over half a billion barrels of oil equivalent (boe) have been discovered in the past three years – including 125 million boe in 2018 and 243 million in 2019 – spurred by large, highpressure high temperature (HPHT) discoveries in the central North Sea.
In 2020 212 million boe were discovered.
The OGA confirmed that the three-year total includes estimates for the UK’s two largest discoveries in a decade – Glengorm and Glendronach.
Costs too fell in 2020, as lower-risk, infrastructureled exploration continues to be the dominant trend within the basin.
Meanwhile, an oversupplied rig market led to a drop in rig costs, with services and rentals forming the largest expense for E&A wells in 2020.
A total of 73 new development wells were completed in 2020, down from a high of 106 the year before, when numerous multi-well campaigns were completed.
Total development drilling spend remained high in 2020 at over £2.1 billion.
As of the end of 2020, only 51 wells were planned for 2021 or around half of those drilled in 2020. However, there is a forecast rebound in drilling activity with central North Sea and northern North Sea leading the way in the years following 2021.
With a total of over 8,000 wellbores drilled so far on the UKCS , the active well stock (excluding those which have been abandoned) comprises 2,625 wellbores, of which 1,736 are producing.
‘Shut-in’ wells have risen to total 717 – though the report notes some of these may still be valuable if production is restored.
Overall, UK well stocks remain flat, as new wells have been largely offset by those plugged and abandoned (P&A).
Well intervention rates also dropped slightly in 2020 to 22% of total well stock (25% in 2019).
These lower rates may be explained by the impact of the pandemic which reduced offshore travel, but the OGA notes that there is clearly “greater potential” for operators to improve well production performance through interventions.
Looking to full-year 2021, the OGA expects 20 E&A wells to have been completed.
OGA head of technology Carlo Procaccini noted: “The pandemic clearly affected industry’s activity in 2020, but there are significant opportunities available to operators to improve production performance through more well interventions.”