Report proposes increase in offshore drilling

A new report has set out recommendations for the management and development of North Sea oil wells.

The Oil and Gas Authority has published its first wells report. Picture: Danny Lawson/PA
The Oil and Gas Authority has published its first wells report. Picture: Danny Lawson/PA

The publication from the Oil and Gas Authority (OGA) calls for the oil and gas industry to work together to increase “cost effective” drilling activity in the UK Continental Shelf (UKCS).

It also proposes reductions in the cost of abandoning existing wells to “maximise reserves” and “sustain production”.

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The OGA’s first Wells Insight report notes more than 7,800 wells have been drilled in the UKCS to date, producing over 44 billion barrels of oil equivalent (boe).

It also found signs of an upturn in new-well activity and said there is still significant potential in the remaining resources in the area.

However, it also concluded the drilling of exploration wells has declined steadily over the last decade and that development drilling has fallen 50% from 2015 to 2017.

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In addition, more than 600 wells, or 30% of the existing active well stock, are “shut-in” at the moment, meaning oil or gas is not currently being extracted.

The report added: “Well abandonment activity has increased four-fold since 2016, with a similar forward trend predicted, with over 150 wells per annum being plugged and abandoned.”

Commenting on the findings Gunther Newcombe, OGA director of operations, said: “There are many examples in the report of industry delivering performance improvements and undertaking innovative approaches to well management plus there is also an indication of an upturn in new well activity, all of which are positive indicators.

“However, there is also a need for a concerted effort by industry to substantially increase cost effective drilling activity, improve the management of existing well stock and reduce well abandonment costs to maximise reserves, sustain production and minimise decommissioning costs.

“This can be achieved by leveraging lessons learned, exploiting technology and working collaboratively with the supply chain to achieve transformational performance gains.”