Reflections

Preparing for the UKCS 30th Licensing Round: The value of looking-back

13.03.17

Preparing for the UKCS 30th Licensing Round: The value of looking-back

The Oil and Gas Authority (OGA) is expected to launch the 30th Licensing Round following the announcement of the awards for the 29th round1. This is part of their strategy to encourage exploration and maximise economic recovery across the entire UKCS. With an estimated 20 billion barrels of oil equivalent2still available, and with recent successes such as the West of Shetland’s Lancaster field, it’s clear the UKCS still has plenty of potential.

The 30th Round will focus on mature areas, and includes blocks which haven’t been available since the 3rd Round. As a mature and established oil and gas province, there’s a lot to learn from previous explorers’ efforts on the UKCS. Looking back can be a crucial step in identifying new opportunities:
unsanctioned discoveries on UKCS

  • What ideas have others tested and what did they learn?Are there any underexplored areas or plays? How has the geological understanding of an area developed over time?
  • Are there any ‘missed’ opportunities? Companies may have walked away from potentially attractive opportunities for reasons other than geology. For instance: because of funding problems, time constraints, partner misalignment or internal screening criteria.
  • Can new data shed fresh light on old opportunities?Technology has developed such that the subsurface can be imaged better. Wells are being drilled more effectively. Plays or targets which weren’t previously viable or were poorly understood could now be more attractive.
  • Are there any unsanctioned discoveries with development potential? Improvements in technology, reduced development costs, innovative ideas and fresh funding may make these discoveries both viable and attractive to companies committed to development on the UKCS.

Looking back at unsanctioned discoveries, as the OGA has recently done, is one way of identifying remaining opportunities. We’ve also used our Relinquishment and Well Look-Back tools to better understand remaining potential and help our clients find the most attractive opportunities.

There’s a lot to learn:

There’s a lot of valuable, publicly available data to learn from. Our Relinquishment tool standardises and combines data from all historic UKCS relinquishment reports3. In the run-up to the 30th Round, the OGA have released an indicative area to give an idea of which areas will be on offer4. We’ve used the Relinquishment tool, alongside information from the unsanctioned discoveries to highlight the breadth of data available in the indicative 30thRound area.

Relinquished prospects in indicative area

  • The OGA has identified 3.4 billion barrels oil equivalent across ~350 unsanctioned discoveries on the UKCS2. 140 of these are currently unlicensed within the indicative 30thRound area.
  • About 570 relinquishment reports are available within this area with details on prospectivity, work programmes and reasons for relinquishment;
    • ~ 65 reports state the main reason for relinquishment of the acreage was due to a lack of funding, logistical problems / time constraints or inactivity
    • ~ 80 associated reports are available for licences relinquished within the last 2 years5
  • The relinquishment reports include details on over 845 prospects / leads;
    • ~ 170 have been relinquished over the last 2 years5
    • ~ 90 have quoted mid case in place volumes > 100mmboe6
    • ~ 150 have quoted a geological chance of success of > 30%

Looking back helps identify new opportunities;
Serica exampleWe’ve had a closer look at the unlicensed acreage in the indicative 30th Round area to give an example of what kind of opportunities will be on offer in the upcoming Round. The prospectivity on block 210/20a7, is one example that stands out.

Most of this block was last licensed to Serica at 100% in the 26th licensing Round in 2011. According to the relinquishment report P1840; Serica evaluated the prospectivity, using newly purchased 3D data and well logs, and aimed to drill the Otter SW prospect. However, Serica were unable to find a drilling partner to share the costs and risks of an exploration well.  As a result, they were forced to relinquish the licence two years later in 2013.

The acreage still has potential to offer. Serica listed eight prospects in the relinquishment report. The Otter SW prospect was the largest of these with estimated recoverable volumes between 15-59mmboe and a geological chance of success of 38%. A further six prospects have estimated P50 recoverable volumes equal to and above 14mmboe and with a geological chance of success between 23% to 57%. The cluster is just south of the Otter field, which at 42mmbbl recoverable8, was developed through a ~20km tie-back to the Eider field. In addition to the Eider field, the cluster is also close to Tern which could be another host for the prospects.

Contact us for more details:

Used individually, relinquishment reports do have their limitations. They may not capture the full picture, may reflect in-built company biases, or may have been completed as a ‘box-ticking’ exercise.

However, when used in combination with other historic exploration sources, such as end of well reports, and the team’s own understanding of an area, they can help contribute to an integrated understanding of a basin. Having a rounded understanding of which plays are targeted most, which players are active in what regions, or why certain opportunities have failed to get traction, feeds into an effective exploration strategy.

We’ve done the leg work to mine and standardise historic exploration data into easy to use, Excel-based tools, designed to help teams draw out insights quickly. The aim is to save you time to focus fully on the geology and on identifying new opportunities.

Please get in touch for more information on how we can help.

Reflection by Vibhusha Raj Sharma