7 Development Activities in 1998

FIELD APPROVALS

7.1 Under the terms of petroleum production licences, development work and the production of petroleum may be carried out only with the consent of the Secretary of  State for Trade and Industry, or under a development and production programme approved by the Secretary of State.

7.2 In 1998 a record number of 39 plans were authorised: 24 oil and 15 gas/condensate. These are listed in Table 7.1.

Table 7.1 - Development Plans authorised in 1998

* Incremental projects, i.e. further development within the petroleum revenue tax area of existing fields.

7.3 UKCS (UK Continental Shelf) hydrocarbon is being produced increasingly from the medium and small size fields. This trend is particularly true in relation to oil production which is no longer dominated by a few large fields. Offshore production in 1998 was from 109 oil fields, 79 gas fields and 16 gas condensate fields. A large proportion of these are small fields developed since 1990. During 1998 this trend was again much in evidence, licensees clearly taking further advantage of available ullage in the existing infrastructure to bring on stream those fields which otherwise may not have been economically viable. All this combined to make 1998 a record year. The number of concurrently producing offshore fields surpassed the 200 mark this year. The number of UK land fields in production increased by 24% to 36 in total, including for the first time the start-up of a coal mine vent gas development, Markham Mine.

7.4 The exploitation of satellite fields from host platforms or other existing drilling centres continued in 1998. Such developments are direct beneficiaries of advances made in extended-reach drilling technology, which has permitted more outlying accumulations to be brought within reach of the existing infrastructure. A notable example is the Columba E Terrace of the Ninian field which started production in 1998 as the third such terrace so exploited.

7.5 The trend for the development of smaller fields in 1998 generally applied to both oil fields as well as the Southern North Sea dry gas fields. The exception to this has been the development of larger gas condensate fields in the Central North Sea and the development activity in the Atlantic Margin. The largest of the new generation of gas condensate fields - Britannia - came on stream late in 1998. Other fields - Elgin, Franklin and Shearwater - are under development. On the Atlantic front the Schiehallion oil field is being developed with one of the world’s largest Floating Production Storage and Offtake (FPSO) vessels.

7.6 The number of UKCS High Pressure High Temperature (HPHT) fields on production increased to three with Mallard and Heron starting in 1998. Development drilling in HPHT gas condensate fields has proceeded more rapidly than predicted due to technology improvement, very thorough preparation and the sharing of know-how across the companies involved. This has reduced the substantial cost of these wells in current projects.

7.7 1998 also saw the start-up of ‘The Eastern Trough Area Project’ (ETAP) consisting of seven oil and gas fields. This development complex was further enhanced by a high degree of co-operation between several license groups which helped to bring the overall project to completion at much lower cost. With the current depressed oil price such co-operation is even more necessary to help develop the remaining reserves in the UKCS, most of which lies in small and complex reservoirs.

FUTURE DEVELOPMENTS

7.8 At the time of going to print 10 oil and gas development plans were being discussed with the Department, and during 1999 discussions could begin on a further 25 - 30 new and incremental development plans.

7.9 The DTI’s Oil and Gas Directorate funds a Hydrocarbons Additional Recovery Programme (HARP) with the aim of providing the Department with the technical support which it requires to fulfil its regulatory function of ensuring maximum recovery of economic hydrocarbons from UK fields, taking due account of environmental concerns. It also has the objective to promote and sponsor innovative recovery techniques and environmental awareness.

7.10 The HARP programme is designed to identify best practice techniques and encourage companies to adopt them in their fields to increase economic recovery, with due regard to the environment. Results from the engineering and requisite environmental studies, are used in the assessment of development plans put forward by UK operators and the monitoring of fields in production.

7.11 Recent work under the programme has had emphasis on environmental considerations associated with field developments, as well as seeking to provide more information at the pre-licensing stage, and this is expected to increase in the months ahead. On reservoir simulation and improved oil recovery, several studies have been conducted, some making positive contribution to the operator’s forward plans. Of note are the studies on below the bubble point operation in several UK oil fields, that demonstrated that controlled accelerated production would increase their ultimate recovery and NPV, and this has been taken up with the operators.

7.12 The Research & Development aspects of the programme are integrated with the confidential, field specific studies to ensure that all opportunities for improved oil and gas recovery are evaluated and that key areas for applied research are identified at an early stage. The significant potential to increase the yield from reservoirs, in the longer term, is recognised by the Foresight Marine Panel, in it’s report, ‘Energies from the Sea - Towards 2020’, where the stated target is a factor of two, for improvement in recovery.

7.13 An Advisory Committee on Hydrocarbons Additional Recovery Research (ACHARR), comprised of senior personnel from the industry, is being asked to advise the Department on the technology and science it should sponsor to secure maximum economic recovery and other means by which the DTI can help the Industry identify and solve its medium term issues. For example, projects for benchmarking performance and practices in the UKCS and worldwide, to improve dissemination and cross-fertilisation, as well as support for poorly funded but important collaborative research.

7.14 The Department participates in a number of joint industry projects, and with guidance from the advisory committee, plays an active part in promoting and sponsoring these. This has resulted in work on numerous hydrocarbon recovery related topics being conducted by research clubs at Imperial College, Heriot-Watt, Edinburgh, Bath, Liverpool and Exeter Universities and at the laboratories of AEA Technology and Oil Plus.

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Title | Table of Contents
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
Index Map | 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 | Legend
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