The North Sea is becoming a mature basin. Production is in decline and investments in exploration are decreasing, while infrastructure ages.
Instead of a few big players, many smaller operators, including independents, are trying to squeeze the last reserves out of the subsurface. Recently, Sir Ian Wood released a report on the future of the UK Continental Shelf. There is still sufficient oil and gas remaining in the UKCS to be produced.
However, in order to realize the potential, the investment level has to go up, more collaboration is needed and resources should be developed on a regional basis rather than by an individual field. The governmental policy for the Dutch sector is used as an example. In the Netherlands, the so called “small fields policy” has been a driver for the development of small fields, i.e. any field in the Netherlands outside the huge Groningen field. In addition to tax relief, active participation in field exploration and production by the Dutch government through EBN is offered to reduce the financial risk. Although this has caused a strong focus on the development of the small, mostly offshore fields, the current production of these fields is again declining below 30 BCM per year.
To further delay the decline, a collaborative innovation program has been initiated to stimulate further development of the small fields in 3 ways:
- Innovative exploration, in order to discover new fields in underexplored areas of the mature basin. In particular 3D seismic reporting provides new information that may lead to the discovery of new petroleum systems.
- Maximize production from existing fields, which suffer from production related issues such as salt deposition and liquid loading. Furthermore, innovation that leads to cost reduction will also lead to an extended lifetime of the fields. Innovative techniques have been proven to be able to extend the lifetime of a field by 5%.
- Development of tough gas reservoirs, which may have already been discovered but not yet developed. Often these offshore stranded fields are tight gas reservoirs. Until now they have been too expensive to develop, or too distant from existing infrastructure. Also, shallow gas reservoirs below 1000m, along with shale gas and coal bed methane, may contribute to new reserves in the future. Innovative stimulation techniques are being developed in the program to unlock these reserves.
Currently, 15 operators in the Dutch sector are collaborating in this program, which also comprises 13 suppliers, several knowledge institutes and academia in the Netherlands. The program is open for international partners and is focused on challenges in mature basins, in particular the North Sea.
More recovery from the North Sea requires governmental stimulation, and collaborative innovation!
The article above was written by Dr. Rene Peters – Program Manager, Dutch Upstream Gas Innovation Program