Increasing offshore drilling activity and improving performance critical to realising UK oil and gas potential
The OGA has issued its first Wells Insight report, following a period of two years collating and verifying well data, which provides a comprehensive insight into UKCS well stock and activity which will provide extremely valuable information for operators, service and technology providers.
The report’s key messages emphasise the requirement to substantially increase new well drilling, coupled with improved performance, to deliver the substantial UKCS reserves potential, improve well management to maximise production, and a need to improve well abandonment planning to reduce costs.
The findings of the Wells Insight 2018 Report include:
- Over 7800 wells have been drilled in the UKCS to date delivering over 44 billion boe.
- E&A well activity has been declining steadily since 2008 and development and infill well activity has halved since 2015 following the oil price drop.
- Well cost reductions over the last few years has been primarily driven by rig and service rate reductions, rather than improved performance, with Non-Productive Time (NPT) greater than 15%.
- Over 600 wells, around 30% of existing active well stock, are currently shut-in and well surveillance and intervention rates are low at 8% and 14% respectively.
- 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.
- There are 240 suspended exploration and appraisal wells, which require permanent abandonment, with 12 operators holding 70% of the well stock.
OGA Director of Operations, Gunther Newcombe 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.”
Oil & Gas UK Upstream Policy Director Mike Tholen added: “The OGA’s Well Insight report highlights opportunities for companies to utilise new technology and build upon the efficiency and performance improvements it has made as it continues to emerge from the downturn. Oil & Gas UK’s Competitive Well Delivery initiative is helping efforts by sharing lessons learned and identifying opportunities to work together across the basin. This collaborative approach to delivering effective and fit for purpose wells activity will allow us to unlock the challenges of drilling in the UKCS, ultimately adding a generation of productive life to the basin as set out in Vision 2035.”
In addition to the Wells Insights report, the OGA also today published ‘Suspended Well Guidance’ and intends in 2019 to publish: a wells strategy, a new wells stewardship expectation and a lessons learned report in support of industry.
Notes to editors:
- A copy of the Wells Insight 2018 Report can be downloaded here.
- The Guidance for Suspended Wells can be downloaded here.
For more information, please contact Tracey Miller, communications manager at the OGA:
Tel: 0300 020 1072 ¦ Email: Tracey.Miller@ogauthority.co.uk
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