Oil and gas companies are set to be grilled on their plans for North Sea extraction as the UK Government puts pressure on operators to reach 80% production efficiency by 2016.
The Department of Energy and Climate Change (DECC) will this week write to all North Sea operators asking them to submit an improvement plan for their assets.
“DECC will be looking for more clarity about our work programmes and our continued operation of existing assets,” Apache North Sea managing director Jim House said today.
“The bottom line is neither the UK government or industry can allow for the production failures of the last decade.”
DECC will review company plans and holding a series of stewardship discussion meetings with North Sea operators in early 2014, said Mr House at an Oil & Gas UK breakfast briefing in Aberdeen today.
“We need leadership and commitment from the top if the industry is going to be successful.” he said.
Each operator needs to have a key understanding of its assets including key risk factors and a target for improvement over the next few years, he added.
BP regional president for the North Sea Trevor Garlick said enhanced oil recovery (EOR) could help boost efficiency, however fiscal measures including the brownfield allowance are needed to guide companies down this path.
“I think we should be really trying to push ourselves on exploiting and maximising recovery of the fields we have,” said Mr Garlick today.
At present only 12 fields – including Chevron’s Captain field and BP’s Magnus field in the North Sea – across the world are under enhanced oil recovery (EOR) schemes, he said.
By using a range of different EOR technologies there was potential to recover an extra one billion barrels from the North Sea, he said.
In fact, calculations suggest 20 EOR projects across the North Sea have the same oil potential – 26 million barrels – as new field developments already in the pipeline.
North Sea rejuvenation would also help boost productivity, said UK managing director for Taqa Bratani, Pete Jones.
Providing an update on the progress of Oil and Gas UK’s rejuvenation work group, which formed in May this year, Mr Jones said data from more than 50 companies was being analysed by an independent third party to create a “UK PLC” view of remaining North Sea reserves.
The group will release the data in May 2014 and draft proposals for a blueprint of North Sea rejuvenation, he added.
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