(Aberdeen, UK) – Tuesday, 9th October 2018 – Governments and regulators need to be more realistic about expectations for UK oil & gas exploration, say experts at research company, Westwood Global Energy Group (Westwood).
Westwood has published a new 10-year analysis of the UK's Offshore Exploration Performance (2008 – 2017). The report reveals that oil and gas exploration saw a significant dip in 2012 -2013 before the oil price crash, when only 10 mmboe was discovered per year. It has since bounced back with volumes discovered increasing to 180 mmboe in 2017, and potentially a similar volume in 2018.
Whilst this still falls short of the Oil & Gas Authority's (OGA) 200 mmboe a year target, it demonstrates that reasonable volumes can be found during times when capital discipline has required only the best prospects to be drilled.
“Taking into consideration all of the trends over the last decade, our view is that 200 million boe will be very challenging to achieve and maintain year-on-year,” says David Moseley, Reports Manager for North West Europe, at Westwood Global Energy Group.
“Our analysis shows that over the last decade, the UK replaced only 22 per cent of oil and gas production through exploration, finding 1.5 billion barrels of oil equivalent (boe) of commercial resources. We also found that the industry tended to over-estimate prospective discovery sizes, with discoveries being only 50 per cent of pre-drill estimates since 2014.”
“The lower finding costs in 2017 are a step in the right direction, but what will be important going forwards is rigorous prospect definition and the discipline to drill fewer but better wells – simply drilling more wells is not the answer.”
Westwood's report goes on to say that:
“The focus going forward will need to be on maintaining a high-quality prospect inventory following on from recent successes in newly emerging plays,” adds David Moseley.
Westwood's report – UK Offshore Exploration Performance 2008-2017 – is the most in-depth analysis available of UK oil & gas exploration performance over the last decade. It gives exploration teams invaluable insight into the trends and drivers for the UK's exploration market. For further information or to purchase the report, visit: https://www.westwoodenergy.com/research/atlas/
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