Not only are we privileged to live in one of the best countries in the world, we have a bounty of oil and gas that’s under-pinned a standard of living many on this planet can only dream of.
Scots are a hardy, can-do race with an appreciation of what’s right. But today we have a problem; premature decommissioning of our oil platforms threatens to rob us of access to remaining resources.
UK oil companies are at best slow and worst obstructive in capitalising on innovative technologies. There is an acknowledged race to be second and an inherent disbelief that anything developed overseas could be better than what we already have.
We are consciously delaying the use of technologies that extend field life, protect jobs and maximise hydrocarbon recovery. Often developed by passionate small businesses, the behemoth oil companies are renowned for dismissing these, preferring the story of “why it won’t work” rather than “what is required for success”.
One clear exception is Apache Energy, an American company, with a highly skilled predominantly Scottish workforce, that has reversed production declines on its elderly North Sea oil fields to increase production levels.
An estimated 40 billion barrels of oil have been extracted from the North Sea with a further 20 billion barrels of potential. This will only be possible if our production infrastructure remains in place.
The value of oil is mind-boggling and few industries can compete. The UK produces one million barrels per day (£45m worth at current oil prices). By comparison, the recently sanctioned £2.5bn Beatrice wind farm is worth up to £525m in contracts over its 25-year life; equivalent to producing only 1000 barrels of oil daily, or 0.1 per cent of current production for the same period.
Everything possible needs to be done to extend the lives of our oilfields.
Low oil prices, mature infrastructure and an expensive operating environment have led many oil companies to believe that they can’t make money, need to cease production and decommission their production facilities.
In many cases it’s not the oil that’s run out, it’s the determination to succeed. Extended Reach Drilling (ERD) is one technology that not only allows exploitation of stranded reserves, overseas it is being used to reduce costs, to make marginal pockets of oil economic. Ironically, it was ground-breaking work by BP that developed the technology 20 years ago, now even the Germans out-drill us in the North Sea!
Decommissioning isn’t a saviour, it’s the Grim Reaper.
Our generation will be measured on results; do we really want to be the ones that risk losing most of the estimated 20 billion barrels of oil left in the North Sea?
CEng FIMechE, Managing Director of Merlin ERD Ltd. Drilling Engineering Experts based in Perth, Scotland