PESGB August 2017

Fri 21 July 2017

Category: Magazines

REVIEW: What Geoscientists Need To Know About Developments Course
ARTICLE:  Impacts of PESGB funding- Gloucestershire Geology Trust
NEWS FEATURE: Nigeria’s Key Oil Players – Overview of licensing history, leading explorers and recent E&P divestments/investments
NEWS FEATURE: New projects to mitigate decline in Western Europe

Plus much more inside

North West Europe mid-year check-in

As we hit the midpoint of the year we have the opportunity to reflect on how the year has gone so far and what we have in store for the coming six months. At the point of writing this article in early July I count a total of seven offshore E&A well spuds in the UK, eleven in Norway, two in the Netherlands and one imminently in Ireland. So on the face of it exploration year-on-year drilling activity continues to remain worryingly low. However, on closer inspection initial success rates seem healthy and reserve additions could be significantly up, particularly in the UK.

In the UK, the year got off to a strong start. Hurricane completed its Halifax exploration well West of Shetland and established a significant oil column in Lewisian basement rocks of the Rona Ridge. This has opened up the potential for the Halifax discovery and Lancaster field to form a single petroleum structure with contingent resources in excess of 500 MMbbls. Whilst it is still early days for Hurricane and its basement asset, there is no doubt that the company could be sitting on the UK’s largest undeveloped offshore discovery.

In the Northern North Sea, Total has now completed its Upper Jurassic Sween exploration well which is rumoured to be a success. If true, this could represent a significant gas condensate find for the company in its Alwyn/Dunbar area. Moving further south, operations are ongoing with BP’s Ravenspurn North exploration programme where the company has been targeting a new Carboniferous tight gas play. The well has now been sidetracked implying some form of success here.

Perhaps what is most striking about the UK this year is the number of large prospects being drilled. I count at least a further six exploration wells with pre-drill volumes in excess of 100 MMboe. Given their proximity to infrastructure and export routes many of these targets have the potential to yield significant value. BP, Statoil, Nexen and Azinor all have wells going down this year that fit this category.
Whilst activity is down year-on-year in Norway, the country continues to dominate NW Europe in terms of offshore E&A drilling activity. The Barents Sea is back in vogue, claiming around a third of all anticipated Norwegian E&A wells this year. Lundin has made good progress this year with appraisal of its Alta discovery. Eni’s Dazzler prospect has come in dry and Lundin’s appraisal of Gohta has been unsuccessful, leading to a likely resource downgrade. Statoil’s Barent Sea campaign has started positively with the Kayak oil discovery, adjacent to the company’s Johan Castberg field. Statoil has plans for at least another four Barents Sea wells this year. Perhaps the most exciting well will test the Korpfjell prospect, located less than 40kms west of the Russian international border. Korpfjell has multi-billion barrel resource potential and comprises a 4-way dip closure with an aerial closure of 3-4 times the size of Johan Sverdrup.

Providence’s much anticipated offshore Ireland well kicks off shortly . The well is targeting the vertically stacked Paleocene Druid and Lower Cretaceous Drombeg exploration prospects in the Porcupine Basin. This represents a significant success for the company with both Total and Cairn farming in to this high impact deepwater well on promoted terms. There is also positive drilling news coming out of the Dutch sector where Hansa Hydrocarbons and Oranje-Nassau have encountered gas at their Ruby prospect.

So all in all it seems like a positive first half of the year. However, as drilling activity ramps up over the summer months, the second half of the year will be the litmus test to whether 2017 represents a material uptick in exploration performance.

Reaching out beyond NW Europe, and a reminder to you all, the 2-day PESGB African E&P Conference is coming up at the end of this month 31st August – 1st September. This annual event, alternating between London and Houston, will be hosted in London at the Business Design Centre in Islington. If you haven’t signed up for a ticket yet get one now as registrations have been high this year.

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