North Sea Oil Depletion
The curtain will fall on North Sea oil production by 2012 if not enough is done to maintain development and exploration, according to a forthcoming report from the Offshore Industry Liaison Committee (OILC).
The report, due out by the end of September, will reignite the debate on depletion rates in the North Sea.
The OILC report will claim that while in the short- term there has been a slow-down in the rate of decline, from 17% in April to 8% in August, the long-term outlook is that the rate of decline will be established at 17% by 2007/2008 without significant increases in investment.
» Source: Sunday Herald
The report draws its figures from real-time metre readings from production rigs and updated data from reserves analysts – which claim that significant features of the geology of the region will result in less oil being produced.
Jake Molloy, general secretary of OILC, said: “A lot of the projections on future production are aspirational. On the bigger oil fields in the north the consistent and common problem is the increase in the water cut. The production levels hoped for by the DTI are not going to be met.”
However, Molloy says that increased investment in infrastructure and new technologies can reverse this process.
“There are instances where the rate of decline has been reversed. The Forties field is a good example. Apache Corp took over in 2003, they invested in tertiary production methods. The oil that’s there you’ll get out faster. This will slow down the rate of decline.
“The big picture is that the depletion rate is about 8.5% from August 2005 to August 2006.
“If the trend is 8.5% down per year, it won’t depart from that profile unless something makes it change. It’s got to be something significant. You’ve got to spend serious money as companies such as Apache have done.
“Aggregating data from 600/700 wells, the picture I’m looking at is 17% depletion on liquids. The depletion picture is graver than 2006 figures would indicate.”
