UK: The Oil and Gas Authority (OGA) has issued its first Well Insight Report, following a period of two years collating and verifying well data and provides a comprehensive insight into United Kingdom Continental Shelf (UKCS) well stock and activity.
The report’s key messages emphasise the requirement to substantially increase new well drilling, coupled with improved performance, to deliver the substantial UKCS reserves potential, improve well management to maximise production, and a need to improve well abandonment planning to reduce costs.
In brief, the findings of the report include:
- Over 7800 wells have been drilled in the UKCS to date delivering over 44 Million Barrels of Oil Equivalent (MMBOE).
- Exploration and appraisal well activity have been declining steadily since 2008 and development and infill well activity has halved since 2015 following the oil price drop.
- Well cost reductions over the last few years have been primarily driven by rig and service rate reductions, rather than improved performance, with Non-Productive Time (NPT) greater than 15 per cent.
- Over 600 wells, around 30 per cent of existing active well stock, are currently shut-in and well surveillance and intervention rates are low at 8 per cent and 14 per cent respectively.
- Well abandonment activity has increased four-fold since 2016, with a similar forward trend predicted, with over 150 wells per annum being plugged and abandoned.
- There are 240 suspended exploration and appraisal wells, which require permanent abandonment, with 12 operators holding 70 per cent of the well stock.
OGA Director of Operations, Gunther Newcombe said there are many examples in the report of industry delivering performance improvements and undertaking innovative approaches to well management plus there is also an indication of an upturn in new well activity, all of which are positive indicators.
“However, there is also a need for a concerted effort by industry to substantially increase cost-effective drilling activity, improve the management of existing well stock and reduce well abandonment costs to maximise reserves, sustain production and minimise decommissioning costs. This can be achieved by leveraging lessons learned, exploiting technology and working collaboratively with the supply chain to achieve transformational performance gains,” Mr Newcombe said.
Oil and Gas UK Upstream Policy Director, Mike Tholen, added to this, commenting that the report highlights opportunities for companies to utilise new technology and build upon the efficiency and performance improvements it has made as it continues to emerge from the downturn.
“Oil and Gas UK’s Competitive Well Delivery initiative is helping efforts by sharing lessons learned and identifying opportunities to work together across the basin. This collaborative approach to delivering effective and fit for purpose wells activity will allow us to unlock the challenges of drilling in the UKCS, ultimately adding a generation of productive life to the basin as set out in Vision 2035,” Mr Tholen commented.
The full 2018 Wells Insight report can be found here.