The Glengorm gas discovery, hailed as the biggest in the UK North Sea for more than a decade, could still turn out to be a major find despite suffering a setback, an analyst has said.
Dave Moseley, senior analyst at Westwood Global Energy Group, said a second appraisal well on the Glengorm field “arguably” had a greater chance of finding commercial volumes than the first.
But Mr Moseley said big question marks remained over the reservoir quality and volumes due to the field’s “highly compartmentalised” nature.
Chinese operator Cnooc confirmed yesterday that the first of two appraisal wells planned on the Glengorm field had not encountered commercial volumes.
When the field was announced as a discovery in January 2019, licence partners estimated that it held recoverable resources of about 250 million barrels of oil equivalent (boe).
This would have put it in the same league as the 250-300m boe Culzean gas field, discovered in 2008 by Maersk Oil, which was subsequently acquired by Total.
Cnooc opted to drill two appraisal wells to firm up the estimates and help plan a potential development of Glengorm, in the central North Sea.
In December 2020, Borr Drilling’s Prospector 5 jack-up rig started drilling the first of those wells, Glengorm South, about 3 miles away from the original discovery well.
Licence partner Energean said yesterday in an announcement on the London Stock Exchange that the well “contained no commercial hydrocarbons”.
Cnooc, which has an office in Kingswells, near Aberdeen, subsequently confirmed the outcome.
However, both companies stressed that Glengorm South was “independent” of the initial discovery well and the Glengorm Central appraisal well, where drilling is expected to start “shortly”.
It means there is still hope of a positive outcome at Glengorm, but yesterday’s announcement is likely to have come as a blow to project partners.
Operator Cnooc holds 50% of the Glengorm licence, French energy giant Total has 25% and Energean has 25%.
Platforms on Total’s Elgin-Franklin and Culzean fields are viewed as potential tie-back hosts for Glengorm.
Mr Moseley said: “There is still the potential for Glengorm to be a high impact discovery.
“The second appraisal well which is expected to spud shortly arguably has a greater chance of finding commercial volumes, given its more central location, just under 2 kilometres (1.2 miles) from the original discovery well.
“That said, the attendant risks of variable reservoir quality and volume uncertainties as a result of compartmentalisation will remain.”
High impact discoveries are those capable of producing more than 100m boe.
Mr Moseley also said that headline resource numbers reported for large discoveries had a “tendency of being over-estimated”, citing Total’s Glendronach project as an example.
Glendronach was billed as the largest “conventional” discovery in the UK since Culzean when it was announced in September 2018.
It was initially thought to be capable of producing 1 trillion cubic feet of gas, which equates to around 167m boe.
However, appraisal drilling led to a 40% reduction in the recoverable resources estimate and a final investment decision on the development has been delayed.