6 Reserves

CLASSIFICATION OF RESERVES

6.1 UKCS reserves may be classified under two main categories - ‘discovered’ and ‘undiscovered’ - together with an intermediate category ‘potential additional reserves’ which comprises discoveries about which little is known or which fail to meet the technical and economic criteria for entry into the main ‘discovered’ reserves tables. For each of these categories there is a different level of confidence. The greatest certainty is assigned to the discovered reserves which are calculated on a field by field basis from both well and seismic data. Each field is assigned reserves in one or more of the "proven", "probable" and "possible" categories according to their chance of being both technically and economically producible. Less certainty can be assigned to the Potential Additional Reserves (PARs) which are primarily single well discoveries. The least certain are the estimates of undiscovered reserves which are made by a statistical assessment of the likely number and size of mapped but undrilled prospects.

Chart 6.1 - Discovered recoverable reserves - Oil

6.2 Except where indicated otherwise, in this chapter, reserves means initially recoverable reserves in oil or gas fields, also known as ultimately recoverable reserves. Continuing previous practice, no proven reserves are assigned to fields without approved development plans.

6.3 Table 6.1 gives the estimates of initially recoverable oil reserves in discoveries to date together with the figures from last year for comparison. Oil reserves include both oil and the liquids and liquefied products obtained from gas fields, gas-condensate fields and from the associated gas in oil fields; the overall totals are simply the sum of the individual field figures. The gas reserves of these fields are presented in Table 6.2. Definitions for liquid fractions from gas condensate fields and natural gas liquids (NGLs) vary across the industry but approximate mass fractions of these hydrocarbon liquids in the total initially recoverable reserves are now 7% as gas condensate liquids and 4% as natural gas liquids.

Table 6.1 - Estimates of discovered recoverable reserves of Oil on the UKCS (1) as at 31 December 1997 (figures in brackets are for 1996)

Notes:

As in previous years the reserves of individual fields have been summed arithmetically.

* The terms ‘proven’, ‘probable’ and ‘possible’ are applied on a field by field basis and are given the following meanings in this context:

Proven - those reserves which on the available evidence are virtually certain to be technically and economically producible (i.e. having a better than 90 per cent chance of being produced).

Probable - those reserves which are not yet proven but which are estimated to have a better than 50 per cent chance of being technically and economically producible.

Possible - those reserves which at present cannot be regarded as ‘probable’ but are estimated to have a significant but less than 50 per cent chance of being technically and economically producible.

** Maximum - the sum of the proven, probable and possible reserves.

(1) Includes onshore and offshore discoveries. All figures include gas liquids and liquefied products

(2) With the exception of the production figures, entries are rounded to five million tonnes. As a result, the sum of the constituent parts may not equal the totals.

(3) Both the total initially recoverable proven reserves and the cumulative oil production include 20 (18⁴) million tonnes of oil from fields that have ceased production.

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Table 6.2 - Estimates of discovered recoverable reserves of GAS (1) on the UKCS (2) as at 31 December 1997 (figures in brackets are for 1996)

Notes:

* The terms ‘proven’, ‘probable’, possible and ‘maximum’ have the meanings defined in Table 6.1

1. Excludes flared gas and gas used on platforms

2. Includes onshore and offshore discoveries.

3. Both the total initially recoverable proven reserves and the cumulative gas production include 14 (14) bcm of gas from fields that have ceased production.

4. Except for the production figures which are rounded to the nearest bcm, all entries are rounded to 5 bcm. As a result, the sum of the constituent parts may not equal the totals.

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6.4 The development plans for eight new offshore oil fields and one onshore oil field were approved during 1997 as listed in Table 7.1. Three high pressure, high temperature gas condensate fields with significant liquid reserves were also approved. Reserves in all approved fields under first time development at 31st December 1997 are shown in Table 6.1 and at the proven plus probable level, these reserves are slightly higher than last year. Seven incremental developments to producing offshore fields were approved -reserves addition not shown separately. The total initially recoverable proven reserves have increased by 155 million tonnes, and when cumulative production to the end of 1996 of 2175 million tonnes is subtracted, remaining proven reserves stand at 690 million, some 25 million tonnes higher than at the end of 1996.

6.5 Initially recoverable reserves at the proven plus probable level have increased significantly to 3,565 million tonnes. The reserves of many established producing fields and fields under construction have again increased due to a combination of infill-drilling, establishment of additional producing reservoirs, cost reduction and innovative operating approaches. After deducting cumulative production, remaining proven plus probable oil reserves stand at 1390 million tonnes compared to 1355 million tonnes last year.

6.6 Possible reserves have decreased due to limited replacement of reserves, now considered probable or proven, from exploration success in 1997 or by fields previously held as only having potential additional reserves (PARs, section 6.13). When combined with the proven and probable reserves, the resulting maximum possible remaining reserves stand at 2015 million tonnes, slightly less than last year.

Gas

6.7 Table 6.2 gives the quantities of gas expected to be available for sale from dry gas fields, gas condensate fields and oil fields with associated gas. Equivalent figures from last year are provided for comparison. Gas which has been or is expected to be flared or used offshore is not included. The liquid recovery from these fields is presented in Table 6.1.

6.8 Five offshore gas fields were approved for development during 1997. These are listed in Table 6.1. In addition, three high pressure, high temperature gas condensate fields in the Central North Sea (Elgin, Franklin and Shearwater), which were approved during the year (see Table 7.1), now add to the proved gas reserves. Also two offshore and one onshore incremental developments were approved. Finally some of the new oilfields noted in section 6.4 also contribute to the gas reserves.

Chart 6.2 - Discovered recoverable reserves - Gas

6.9 Initially recoverable proven gas reserves increased by 90 billion cubic metres (bcm) to 1,985 bcm. After deducting cumulative production of some 1222 bcm, remaining proven reserves stand at 765 bcm which is almost the same as last year. At the proven plus probable level the initially recoverable reserves have increased slightly but the remaining recoverable gas reserves have decreased, as in 1996. The maximum possible remaining reserves, have risen to 1,985 bcm; slightly exceeding last years level.

Dry Gas

6.10 The initially recoverable reserves of southern basin dry gas fields in production or under development have increased slightly over the year. This is the result of the development drilling to access greater volumes of gas. Dry gas reserves in production or under development in areas outside the southern basin have remained largely static but the related level of significant dry gas discoveries still under appraisal has risen.

Condensate Gas

6.11 The initially recoverable gas reserves of those condensate fields in production and under development is essentially unchanged but the confidence gained from development drilling and production has permitted a greater proportion of these to be classified as proven. Three large gas condensate fields have this year moved forward into development reducing the extent of reserves currently under appraisal.

Associated Gas

6.12 Reviews of a number of oilfields already in production have continued to result in an increase in the proven plus probable estimates of their associated gas reserves. This improvement has been supported by an increased confidence placed on the gas reserves of the many oilfields approved over the past year.

POTENTIAL ADDITIONAL RESERVES

6.13 Potential Additional Reserves exist in discoveries which do not meet the criteria for inclusion as possible reserves, as defined in Table 6.1. The current estimates are shown in Table 6.3.

Table 6.3 - Potential additional reserves (1)

Note:

(1) Totals have been rounded to 5 million tonnes of oil or 5 bcm of gas

6.14 The ranges of reserves in this category may vary from year to year. As additional data becomes available, some reserves may be transferred from this category to the Discovered Recoverable category. Similarly reserves may be transferred to this category from the Discovered Recoverable category.

6.15 The figures shown in Table 6.3 take account of all discoveries made up to the end of 1997 which do not justify inclusion in the Discovered Recoverable category.

6.16 The oil and gas reserves are down from last year by 35 - 40 million tonnes and 20 - 35 bcm respectively. This reflects reserves now being considered for possible development. Therefore these reserves are transferred to the Discovered Recoverable category. The reserves figures contain some heavy oil accumulations. Recent technical progress has increased the possibility of future development.

UNDISCOVERED RECOVERABLE RESERVES

6.17 The methodology for calculating this category of reserves remains unchanged from previous years. The results are shown in Table 6.4.

Table 6.4 - Estimates of undiscovered recoverable reserves on the UKCS (1)
Reserves in future discoveries by geological area

Notes:

(1) Includes onshore and offshore assessments.

(2) Totals for each offshore area have been rounded to 10 million tonnes of oil or to 5 billion cubic metres of gas. Totals for each onshore area have been rounded to 5 million tonnes of oil or 1 billion cubic metres of gas.

(3) No account has been taken of projected fuel usage and flaring.

(4) Gas associated with oil and condensate.

(5) Every offshore prospect included in the detailed analysis on which this table is based is estimated to contain reserves of at least 2 million tonnes

of oil (15 million barrels) or 2.8 billion cubic metres of gas (0.1 trillion cubic feet).

(6) Part of Basin yet to be assessed — work currently underway.

(7) The bottom limit of the range is taken as zero as no oil has been found to date in this area.

(8) The lower end of the range is zero as a consequence of rounding.

* Areas where detailed studies have been carried out.

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6.18 In the Northern and Central North Sea (area (a)), the West of Shetlands (area (b)), the Southern Basin, Irish Sea and Celtic Sea Basins (area (d)) and the East Midlands, Weald, West and Southeast England, North Yorkshire and Lincolnshire (area(e)), only prospects that have been mapped are used in the calculation. Additional reserves are likely in these areas as no account can be taken of potential traps that may exist beyond the resolution of current seismic penetration.

6.19 Standard statistical techniques are used in these areas to obtain estimates within each of these basins, and these are added to obtain the ranges in Table 6.4. The data-base has been modified to take account of new drilling and mapping in these areas.

6.20 There is insufficient exploration activity and technical data available to use these techniques in the West of Scotland (area(c)) and other areas of the UKCS (area (f)). The numbers remain the same as last year.

6.21 The Undiscovered Recoverable Oil Reserves are now estimated to lie in the range 285 - 2,680 million tonnes compared with last years' range of 285 -2,700 million tonnes. Recoverable Gas Reserves are now estimated to lie in the range 500 - 1,700 bcm compared with last years’ range of 440 - 1,585 bcm.

6.22 The limits of these ranges should not be regarded as minima or maxima.

6.23 Cut-offs are maintained at 2 million tonnes in the case of offshore oil and 2.8 bcm for offshore gas. In the onshore areas, the cut-offs used are 50 thousand tonnes in the case of oil and 0.1 bcm for gas.

6.24 No estimate is made of unconventional gas resources.

6.25 Estimates of undiscovered reserves must be treated with caution. They provide only a broad indication of the ultimate remaining potential.

ESTIMATED POTENTIAL OF THE UKCS

6.26 With cumulative production to date of 2175 million tonnes of oil and 1222 bcm of gas, the total remaining reserves are estimated to lie in the range of some 1070 - 5005 million tonnes of oil and 1335 -3905 bcm of gas.

Table 6.5 - UK initially recoverable reserves

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Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 | Chapter 6 | Chapter 7 | Chapter 8 | Chapter 9
Appendix 1 | Appendix 2 | Appendix 3 | Appendix 4 | Appendix 5 | Appendix 6 | Appendix 7 | Appendix 8
Appendix 9 | Appendix 10 | Appendix 11 | Appendix 12 | Appendix 13 | Appendix 14 | Appendix 15 | Appendix 16 | Appendix 17
Plate 1 | Plate 2W | Plate 2E | Plate 3W | Plate 3E | Plate 4W | Plate 4E | Plate 5W | Plate 5E | Plate 6 | Plate 7
Plate 8W | Plate 8E | Plate 9W | Plate 9E | Plate 10W | Plate 10E | Plate 11 | Plate 12