north sea oil terminal

Regulator wants new measures to boost North Sea oil production

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Oil and gas production in the North Sea could be boosted with a series of new measures, the regulating body has said.

The North Sea Transition Authority (NSTA) said that production remained low in 2021 versus pre-pandemic levels but that current project pipelines and a new licensing round would boost drilling activity.

Production totalled around 480 million barrels in 2021, compared with 600 million in 2019.

The NSTA’s Wells Insight Report found that pre-pandemic drilling operations were taking place in 141 wells in 2019. But last year, drilling operations began on only 66 wells, including five exploration, five appraisal and 56 development wells, similar to levels recorded in 2020.

The report suggests that a focus on second wellbores, the new licensing round and maintaining existing wells could all help boost production in years to come.

NSTA head of technology Carlo Procaccini said: “Amid the energy crisis, it is vital that North Sea industry works quickly to secure additional supplies of oil and gas, produced as cleanly as possible. That means drilling more new wells and restoring those which can be repaired.

“The NSTA is working with industry on a number of fronts to support this work. Part of that involves sharing data, such as those presented in this report, and benchmarking to keep industry better informed on wells performance and priority areas.”

Earlier this month, the NSTA issued more than 100 new oil and gas drilling licences to “boost” the UK’s energy sector.

But climate scientists criticised the move, claiming the round will do little to lower bills or improve security in the near term, while also counteracting efforts to curb global warming. Prime Minister Liz Truss has previously expressed strong support for fracking and other forms of fossil fuel extraction.

About half of the 66 wells drilled last year targeted near-infrastructure opportunities with a quick turnaround time. One discovery made in 2021 in a well-developed area was brought on-stream in early 2022, well below the average discovery to production timescale of five years.

Faster development can also be achieved with geological sidetracks where a secondary wellbore is drilled away from the original hole in order to reach a new target, NSTA said.

These can typically be drilled more quickly and at lower cost than a new well from the surface – around 30 per cent of last year’s wells were drilled this way.

More recent signs suggest that drilling will pick up in the medium term. Commodity prices have stayed consistently high this year, accelerating development plans of 30 projects which target 1.5 billion barrels and are currently progressing towards consent decisions.

But due to a reduction in well maintenance in 2021, the performance of the existing wellstock has further declined, the NSTA said, with 34 per cent of total active wells on the UK continental shelf now shut-in or plugged.

It wants to see more well interventions to reactivate production which can cost just £5-10 per barrel, an attractive option for industry while oil and gas prices are high.

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