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New OGA Wells Strategy Focuses on Improving Economics of UKCS Oil and Gas

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The Oil and Gas Authority (OGA) has published a new report that outlines how it plans to work with industry and government to maximize economic recovery from the UK Continental Shelf (UKCS) by increasing activity and improving performance of UK North Sea wells. The strategy supports the Maximise Economic Recovery from UK Oil & Gas Strategy and Vision 2035, whose goal is to achieve £140 billion additional gross revenue from UKCS production by that time. Authors of the strategy say it represents a step change in the way the well cycle will be managed by industry and stewarded by the OGA. It is organized around three themes.

  • Regulatory compliance to the license conditions, data reporting, and retention obligations of the Maximise Economic Recovery from UK Oil & Gas Strategy

  • Business processes to increase well activity (construction and intervention) to find and deliver UKCS potential resources

  • Performance improvement of all activities throughout the well value cycle, to reduce costs and improve recovery.

Follow-On to 2018 Insights Report

To date, more than 7,800 wells have been drilled in the UKCS, which have delivered more than 44 billion BOE. Remaining potential is estimated at 10 to 20 billion BOE. In November 2018, the OGA published its first Wells Insight Report, which noted the following findings.

  • Drilling activity is in decline

  • No improvements in drilling performance have occurred in the past 10 years

  • Huge value still exists from existing wells

  • About 30% of active wells are shut in

  • Surveillance and intervention rates are too low

  • More than 200 open-water suspended exploration and appraisal wells exist (average age 27 years)

  • More than 150 wells per year expected to be fully decommissioned through plugging and abandonment.

Key Success Factors

To address these issues and improve both reserves and economic recovery, the OGA identified five key success factors—value, well construction, intervention, well plugging and abandonment, and technology.

  • Balancing cost vs. recovery in well design would improve the economics of potential new developments and infill wells, enabling project sanctions and extending field life and ultimate economic recovery.
  • Improving well construction performance could increase recovery per well, thus reducing the estimated 2,000 to 3,000 new wells needed to achieve targets.
  • Restoring production from shut-in wells and reducing well losses could add production equivalent to a large new field, improve the economics of mature fields, and potentially extend field life. EOR techniques were suggested to improve potential recovery factors.
  • Regarding well plug and abandonment, the OGA cited performance improvements that have been achieved through adoption of improved working practices and alternative business models, trying new technologies, and sharing knowledge.
  • Developing and using appropriate new technologies can reduce costs across the well lifecycle, increase recovery factors, and anchor a high value chain in the UKCS. Initiatives such as the Oil & Gas Technology Centre were mentioned.

In the report, OGA outlines how it will implement its new strategy through the stewardship process, wells targets and KPIs, regulatory compliance, information sharing, and further support.

To download the report, go to https://www.ogauthority.co.uk/news-publications/publications/2019/oil-and-gas-authority-publishes-first-wells-strategy/

New OGA Wells Strategy Focuses on Improving Economics of UKCS Oil and Gas

Judy Feder, Technology Editor

02 August 2019

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