A year ago, UK North Sea drilling was going great guns with exploration and appraisal drilling, and it pretty much stayed that way for 2008, which turned out to be the busiest since 1997. During the first quarter, 20 wells and eight sidetracks were started.
By comparison, just seven well spuds and 10 sidetracks have commenced over the same period this year. But it should also be noted that, in Q1 1997, only nine were spudded, yet it turned into a very good year. So first-quarter stats are not necessarily a pointer to the year as a whole, though current economic conditions are hardly conducive to a bumper year.
Although there are still 10 mobile units and one platform rig currently active, these are predominantly involved with appraisal work.
Even those wells designated exploratory, such as Nexen’s Hobby well 20/1-8 and Chevron’s long-running Rosebank North well 213/ 27-3, which spudded mid-November, 2008, could be considered part of broader appraisal campaigns.
The long-running nature of some current wells is keeping the active rig fleet going for the time being. When these finish, the true picture of activity this year will emerge.
In the Central North Sea, Talisman’s 22/17-4Z Godwin, CNR’s 22/27a-4 Deep Banff and BG’s 23/21-7X Columbus probes continue. Shell’s Fram appraisal 29/3c-8Z is understood to be testing. The super-major’s Mid-North Sea High wildcat, 37/25-1, on the Devonian Corbenic Prospect has finished with no indications of success.
In the Inner Moray Firth, Caithness has suspended the land-rig-based operations on Lybster. The rig drilled an extended-reach well into the offshore to delimit the discovery and is now stacked on location. Nexen has confirmed Hobby as a discovery well and initiated an appraisal sidetrack. Total has re-entered Kessog appraisal well 30/1c-9 to conduct an extended test on the Upper Jurassic reservoir.
In the Southern North Sea, Venture suspended Carna exploration well 43/21b-5Z as a commercial gas discovery, having flowed 9million cu ft per day from the Carboniferous, while Silverstone abandoned the Vulcan Northwest appraisal 48/25c-6 as a sub-commercial gas discovery. GDF Suez’s 44/12a-4 Cygnus and Venture’s Kew 49/4c-7Z appraisals continue.
Few wells scheduled for the first quarter of the current year went ahead, reflecting the speed at which companies can change their plans relative to economic conditions. That said, there remains a positive outlook for the drilling forecast as far ahead as 2013, perhaps reflecting the optimism among operators for a relatively quick end to the downturn, with Hannon Westwood’s planned well pool currently showing in excess of 200 UK North Sea wells.
These predominantly comprise exploration wells, and it is to be expected that these will be deferred until conditions improve.
A major risk to the pace of drilling may be consolidation in the sector, which as widely predicted, and appears to be gaining momentum. Conversely, the acquisition of under-funded portfolios by larger companies could lead to wells being reinstated.
April will see the Ensco 92, mobilised from Carna to refit in The Netherlands, start a multi-well programme in the East Irish Sea Basin. The campaign is due to start with two back-to-back wells for EOG.
Even without the continuation of Oilexco’s prolific sidetracking campaign of recent years – that company is the subject of Premier’s recently agreed bid – Nexen’s programme of drilling in and around block 20/1a will result in significant sidetrack activity as its discoveries of the last two to three years are appraised.
All in all, 2009 activity levels may yet spring a surprise.
Simon Robertshaw’s column is courtesy of drilling analysts Hannon Westwood LLP
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