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Oil and gas groups urged to take on UKCS exploration and appraisal work

02 December 2009

Exploration and appraisal work on oil and gas prospects around the UK Continental Shelf needs to be ramped up in the near term if companies want to take advantage of existing infrastructure in the region, according to industry experts.

Analysts from consultancy Hannon Westwood reckon a recent fall-off in E&A activity around the UKCS needs to be reversed before infrastructure abandonment makes it even harder for exploration companies to tap in to incremental reserves.

The warning comes ahead of the expected launch of the 26th Round of licence awards in January 2010, where companies will once again get the chance to apply for undeveloped discoveries and undrilled prospects.

Ahead of the next licensing round, Hannon Westwood has released a Screening Study of the resource remaining on the UKCS. To date, these include the reserves and production rates in producing fields, 448 undeveloped discoveries and 1,591 undrilled prospects. The study looks at all the unlicensed undrilled prospects and unlicensed undeveloped discoveries that are held within the Hannon Westwood databases.

Analysis of these databases shows that on currently unlicensed acreage there are 57 undeveloped discoveries with unrisked potential reserves of 513 million barrels of oil equivalent (mmboe), including 281 million barrels of oil (mmbbls) and 1388 billion cubic feet of gas (bcf). There are six abandoned fields with re-development potential and 518 undrilled prospects, with 22.65 billion bbls, including 15.53 billion barrels and 42.76 trillion cubic feet of gas (tcf) of unrisked resource.

Hannon Westwood believes that as the area of unlicensed acreage increases through further voluntary and statutory relinquishments, the volume of reserves and resources available for licensing in the 26th Round will also increase.

Chris Bulley, an executive director at Hannon Westwood, said: “This will be the first Licence Round for two years and is the first since the oil price collapse and credit crunch, so it will be interesting to see the level of activity/applications/participation that is generated. There is significant potential on the UKCS still to be de-risked and realised and this Round provides an excellent opportunity to access both undeveloped discoveries and undrilled prospects.”

He added: “The recent drop in E&A drilling activity must be viewed as a temporary reduction if the full potential of the UKCS is to be realised before infrastructure abandonment conspires to reduce the areas where incremental reserves can be developed.”






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