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UKCS Prospectivity- findings from Oil and Gas UK
2008 Economic Report
Oil supply
In
2007, our indigenous oil production (583 million boe) exceeded the
UK’s
consumption by 8 million boe.
There was no decline in oil production
in 2007 and this is good progress given that there were some delays
in project start-ups, which are now due to come on-stream this year.
Current forecasts indicate that supply
and demand will continue to be closely matched in 2008 and 2009
providing that current development targets are met.
Furthermore, if investment in the UKCS
is maintained, around 40% of our nation’s oil demand will be still
be met in the year 2020.
Gas supply
In
terms of gas production, there was a reduction of 10% in 2007, which
was below forecast, however the CATS pipeline outage lasted for 3
months and accounts for 3% of this decline.
This year the UKCS will satisfy 70-75%
of
UK
gas demand and whilst it continues to import gas, our indigenous
supply will continue to make an important contribution as the demand
rises.
For instance, the share of energy
demand provided by gas is set to rise on average by 2% every year
over the next decade.
With
sustained investment, the UKCS could still meet 60% of indigenous
demand in 2010.
Overview
The
UK
is still the 8th
largest gas producer and the 13th
largest oil producer in the world.
The initial PILOT target of 3 million
boepd in 2010 will almost certainly not be reached due to declining
investor confidence, and is currently forecast at 2.4 million boepd.
It is estimated that under
current production targets, the UKCS will provide 12% of the
nation’s oil and gas supply in 2020 however, this figure could reach
40% with sustained investment.
Exploration &
Appraisal activity
Exploration and appraisal well drilling remained at a high level in
2007 and this trend is forecast to continue into 2008 and 2009.
The numbers of exploration and appraisal well spuds were
roughly equal, however a large number of appraisal sidetracks were
also drilled. The overall
exploration success rate was around 40% and 13 discoveries were
made, finding volumes estimated between 380 and 420mmboe.
This was lower than 2006 but is consistent with other prior
years. The Atlantic Margin
remains largely unexploited where the potential rewards (yet risks)
are high. However,
exploration in this region is expected to increase in the coming
years due to pressure from Frontier Licence commitments and the
acreage released via the Fallow process.
The fallow acreage, promote and frontier licences continue to
be worthwhile initiatives in generating UKCS activity, accounting
for 17, 8 and 1 E&A wells, respectively last year.
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Operations Index
