Heavy-oil production in the North Sea is expected to “drop off a cliff” in coming years but new developments will aid its return, the boss of Nautical Petroleum said yesterday.
Nautical chief executive Steve Jenkins said there were about 250,000 barrels of heavy oil being produced daily in the North Sea in 2002 from fields including Captain and Alba.
He added that that was forecast to drop off a cliff to 40,000 barrels a day by 2014, but, with new fields expected to come online from the following year, including Statoil’s Mariner and Bressay plus the Kraken field – 25% owned by Nautical – the figure was expected to rise to 140,000 barrels.
Mr Jenkins also highlighted that industry estimates of 2billion barrels of heavy oil had been produced so far, with more than 5billion undeveloped and a further 2-6billion barrels waiting to be found.
Much of this is east of Shetland, where Mariner, Bressay, Kraken and Bentley are.
“UK continental shelf heavy oil is a significant resource,” said Mr Jenkins, adding: “Using modern seismic we can identify the sands with heavy oil in.
“We have come on leaps and bounds in the technology, and overcome drilling and production challenges. If these fields come on stream, we will be back up to 140,000 barrels of oil per day of heavy oil in the UK North Sea.
“It is worth producing because the discounts (to benchmark Brent) are getting narrower and the Treasury and Department of Energy and Climate Change has given us a benign fiscal regime, which has given heavy-oil developments a real option in the North Sea.”
London-based Nautical Petroleum was bought by Edinburgh-based Cairn Energy for £414million in June.
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