Capital spending on U.K. Continental Shelf (UKCS) oil and gas development in 1992-94 will reach about $36 billion, Arthur Andersen Petroleum Services (AAPS) predicts.
Expenditures during the 3 year period would be about 55% more than capital spending for UKCS development in 1989-91, AAPS noted.
Another industry forecast, by Grampian Regional Council, Aberdeen, estimates more than 90 new fields could be developed on the UKCS during the next 20 years.
SPENDING OUTLOOK
Gary Howorth, manager of the AAPS London office, said capital spending much greater than that projected is unlikely because the UKCS is a mature oil and gas province. Many projects planned through 2001 will be satellite developments tied to nearby major fields with infrastructure and processing facilities already in place.
"Most of these developments will be profitable, but incremental reserves added will be small," Howorth said.
AAPS projections are based on data covering 176 fields currently under development or with projects in planning, including potentially commercial fields expected to go on stream in 1995-2000. Data reflect projections of activity from more than 55 companies operating on the UKCS.
AAPS expects UKCS oil production to peak in 1995 at 2.5-2.8 million b/d, up from 2-2.1 million b/d this year.
Gas production is expected to continue increasing through 1999 to 8-9.2 bcfd, depending on demand, from a record 5.1 bcfd in 1991.
AAPS says 50% of remaining UKCS oil and gas reserves are held by the top six companies included in its survey and 85% by the top 20 companies.
UKCS oil production by 1995 will be 30-45% greater than in 1991 and about 5% higher than production estimated by an AAPS forecast released in January 1992. Incremental additions to the AAPS outlook result from increased estimates of expected production from certain projects, infill drilling, assumed starts of pilot projects, and production starts earlier than first expected.
UKCS oil production during 1984-87 averaged about 2.6 million b/d, dropped in 1988 to 2.4 million b/d, and fell further during 1989-91 to 1.9 million b/d.
AAPS says gas production the next 3 years will account for 31-32% of all U.K. production. That proportion will continue increasing through 1995 as gas production rises.
Oil production after 1995 will begin declining, and gas flow by 2000 will account for more than 45% of UKCS production.
UKCS gas production the past 2 years has risen from an average of about 4 bcfd for most of the preceding decade.
Gas throughout the 1980s accounted for an average 23% of total UKCS oil and gas production.
FIELD PRODUCTION STARTS
UKCS operators reported development under way on 24 fields with combined reserves totaling 3 billion bbl of oil and 10-11 tcf of gas.
AAPS says operators this year have approved six field developments: North Morecambe in February, Lancelot and Guinevere in March, Caister and Murdoch in April, Tristan in June, Hyde in July, and Orwell in August. Approvals still are expected this year for projects on Ann, Beinn, Dunbar, Hudson, and Markham fields, and announcements are possible for Andrew, Galleon, Gryphon, Joanne, and Judy fields.
Nine UKCS oil and gas fields are expected to begin production this year, compared with only three in 1991.
UKCS operators so far this year have started production from four UKCS fields: Staffa Mar. 1, Donan Apr. 28, Miller June 8, and Emerald Aug. 5. AAPS says production could begin this year from Markham gas field-astride the U.K.-Netherlands boundary-and from Gannet, Lyell, Pickerill, and Beinn fields.
Beryl field also is expected to begin producing gas into the SAGE system.
Main contributors to peak oil production expected in 1995 will be: Miller and Gannet fields starting this year, East Brae, Bruce, Gryphon, the Piper area, Saltire, Scott, and T-Block fields beginning in 1993, and Alba and Nelson beginning in 1994.
AAPS expects Bruce and Britannia fields, beginning in 1993 and 1997, respectively, will account for 8-9% of U.K. gas production during the rest of the decade. Brae area beginning in 1994 will be another big contributor to rising UKCS gas production.
GRAMPIAN REPORT
Grampian notes more fields the next 10 years will be developed by subsea or floating production facilities, using the North Sea's growing infrastructure (see table). Most future fields will be smaller than those now in production.
There still will be requirements for platforms for larger and more complex reservoirs, however, particularly for gas/condensate fields in the Central North Sea and as the industry explores farther north and west.
At present, less than 10% of proved gas reserves come from gas/condensate fields. Of the total identified gas reserves, however, almost 25% are forecast to be produced from Central North Sea gas/condensate fields. A critical factor in phasing of new developments, says the report, is the timing of offshore gas pipelines.
Meantime, says Grampian, U.K. offshore exploration has fallen from its high level last year, with about 42 rigs now working in the central and northern North Sea. Rig demand probably will stay relatively high for a few years, Grampian says, and certainly remain at more than 25 for much of the 1990s.
On oil prospects, the report concludes, the U.K.'s favorable political and economic conditions will not be enough to avoid competition for investment from potentially more productive regions such as Africa, South America, and Russia.
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