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Archive for the ‘UK’ Category

  • The UK government has approved extraction from the Jackdaw gas field in the North Sea
  • Jackdaw “will start to supply gas to British homes and businesses from as early as the end of this month, helping heat millions of homes and protecting hundreds of jobs”
  • Chancellor John Healey says a new “Energy Wealth Fund”, using tax revenue from oil and gas extraction, will invest in “green transition” (but of course!😉🙃)
  • What about Rosebank?

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Jim Fraser and JL Daeschler

JL Daeschler, North Sea pioneer and BOE contributor, met this week with Jim Fraser, an Aberdonian PhD Researcher working at the University of Edinburgh.

Jim is investigating how North Sea oil and gas has transformed social and cultural life in Aberdeen, and what the future holds for the region considering the current uncertainty within the North Sea industry. Who better to learn from than JL, an important figure in North Sea oil and gas development?

Our best to Jim as he pursues this important research.

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Argyll first production – 1975

The world’s first floating production unit and the North Sea’s first production facility was in the Argyll field in the UK sector of the North Sea.

JL Daeschler made a presentation on the project at Offshore Europe 1977. See the attached summary.

As JL highlights in the attachment, the press focused on the the perceived negative – the rather high water cut. JL addressed the water production issue by carefully designing the deck handling facilities.

Per JL, “we had some fun for 2 years getting the separator to work in +/- 3 degree pitch and roll, then had the additional water handling challenge.”

The team worked it out. JL can laugh about the challenges now. He proudly notes that “the field produced for 20 years + thanks to evolving technology and first class engineers and contractors.” Such was the life of a pioneering offshore engineer.

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JL Daeschler informs us that Equinor may shun further investments in the UK if new oil and gas fields at Rosebank and Jackdaw are not approved.

Rosebank and Jackdaw are operated by Adura, an Equinor-Shell joint venture. Much of the infrastructure for Jackaw is already in place, and gas production could begin this winter when it may be badly needed. Production at Rosebank, which is primarily an oil field, could begin in the first half of 2027.

BBC quotes Equinor chief Anders Opedal:

“The question will be: is the UK investable in the future? I hope it will not come to that.”

“It’s a political choice.The North Sea oil and gas industry started on the UK side. We learned from the UK and it’s actually the same geology on both sides of the border – several fields actually cross it.”

Ithaca Energy is a 20% Rosebank owner. Ithaca has an Israel connection which has further incited project opponents. (Which do left-wing activists hate more – oil or Israel?)

Sadly, as JL laments, the UK is reaping what it has sown. Approval of Rosebank and Jackdaw is a small but important step toward energy sanity.

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Our guy in Scotland, JL Daeschler, reminds Sunday Times readers that the UK can’t simply summon the return of the long neglected North Sea oil industry.

The editors deleted this sentence from JL’s letter: “Thank you Norway and USA for supplying us energy.” 😉

Compare Norway and UK management of their North Sea resources. The UK govt still hasn’t even made the clear and obvious decision to approve Jackdaw and Rosebank production.

The West of Shetland area has high oil and gas resource potential. Researchers at the University of Aberdeen are advocating a tailored management system to facilitate development.

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with Margaret Thatcher in 1979

North Sea pioneer JL Daeschler comments on the passing of Sir Ian Wood: “A great North Seas leader who had an amazing career. He founded the Wood Group, an internationally important engineering firm. Mustang Engineering, well known to the US offshore industry, became part of the Wood Group in 2000.”

Last September, JL reminisced about Ian following the sale of the Wood Group:

I knew Ian in the early North Sea development stage. He became Sir Ian Wood. We used to chat at various conferences in Houston, Stavanger, and Aberdeen. Ian was an energetic man, who had a friendly a approach to our North Sea challenges. He was a true Aberdonian entrepreneur who employed 1000’s in offshore related disciplines worldwide.

Sir Ian turned his father’s fishing business into the Wood Group oil giant, leading the way as Aberdeen blossomed into Europe’s energy capital. When Sir Ian announced his retirement in 2012, Wood Group employed 41,000 people in 50 countries.

The Aberdeen Press and Journal and the BBC have posted excellent obituaries.

RIP Ian. You made the offshore world safer and more productive!

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North Sea pioneer JL Daeschler is among those lamenting the sad state of UK exploration and development, commenting that he is “green” with envy of Norway’s long term management of their oil and gas resources.

Researchers at the University of Aberdeen may be showing the way for exploitation of the West of Shetland area’s estimated 4.7 billion bbls of oil equivalent (boe). They are advocating a tailored management regime for this challenging area. Per the researchers:

“West of Shetland is not a depleted frontier – it is a technically demanding but strategically important energy province,” said Nick Schofield, Professor of Igneous & Petroleum Geology at the University of Aberdeen. “Our study highlights the remaining oil and gas potential in the area, which could extend the life of the UK’s oil and gas sector.”

John Underhill, Aberdeen University’s Director for Energy Transition said: “Failing to develop these domestic resources risks increasing the UK’s dependence on imports, with implications for emissions, costs, jobs, tax revenues and energy security.” 

The researchers argue that a “one-size-fits-all” approach to UKCS taxation fails to reflect the unique risks and costs associated with West of Shetland exploration, appraisal and development. As a result, they say projects that are technically viable may remain economically marginal under current conditions.

The University of Aberdeen paper (linked) advocates a tailored regime that would:

  • Recognize higher exploration and development costs
  • Account for increased geological and operational risk
  • Encourage investment in challenging projects
  • Enable tie-backs to existing infrastructure that would provide energy security, tax revenues, retain jobs and be better for the global climate than importing liquified natural gas (LNG), which carries a higher carbon footprint.
  • Support the development of already identified prospects within licensed areas

Rosebank update:

The West of Shetland area includes the controversial Rosebank project (map above), which has yet to receive environmental consent from the UK govt. Following a court ruling, Equinor (operator) was given permission to proceed with the project, including preparatory engineering and construction work, but no production is allowed pending final govt approval.

The PetoJarl Rosebank Floating Production Storage and Offloading (PFSO) vessel recently left its dry dock in Norway and has arrived in the West of Shetland basin. The vessel will undergo commissioning to be ready for production by the end of the year.

PetroJari Rosebank FPSO

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From the BBC: Three stowaway baby rabbits have been rescued after being discovered on a drilling rig in the North Sea.

The unexpected visitors were shipped from Aberdeen to the Valaris Norway, about 93 miles (150km) off the coast of Lincolnshire. It is believed they hopped into a container in Dundee, which was taken by road to Aberdeen, before travelling on the offshore ship Aquarius to Ithaca Energy’s Cygnus field.

Rigs-to-Rabbits will be a nice addition to our Rigs-to-Reefs list.😉

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Some of us remember when the UK and Norway were friendly North Sea oil and gas rivals – competing to be tops in production, technology, safety, and even promotion at conferences like OTC. Take a look at the production chart below and note the UK’s production leadership followed by the extraordinary decline.

So what happened? Norway may have better oil and gas resource potential, but that is only part of the story. While Norway was managing their offshore sector to succeed, the UK was seemingly managing theirs to fail.

Norway’s North Sea remains far more active because the government promotes exploration through predictable licensing, cost-recovery incentives, and a focus on adding resources to existing infrastructure.

The UK, by contrast, has shifted toward limited development and decommissioning. In recent years, the UK’s windfall tax on oil and gas profits was raised to 78 percent, and licences for exploratory drilling in new areas were banned.

In 2022, the UK government even changed the name of the Oil and Gas Authority to the more trendy North Sea Transition Authority. (Changing names is one thing; delivering reliable energy at reasonable prices is quite something else.)

The stark policy differences are evident in the exploration drilling numbers – sustained drilling vs. sustained decline (charts below).

Norwegian Continental Shelf Directorate data
UK NSTA data:exploration wells spudded with original wellbore intent classified as “exploration” (offshore UK includes geological sidetracks).

JL Daeschler shared this excellent response by Natalie Coupar (excerpts below) to tired anti-exploration arguments that are popular in the UK and elsewhere:

“Claim: Hundreds of North Sea licences have delivered only “36 days of gas”, proving new drilling does not improve energy security.

“This actually proves the opposite. In a mature basin like the North Sea, you need a constant churn of investment and new licences just to stand still. Without ongoing activity, decline accelerates and import dependence rises faster. That is why countries like Norway continue to license and develop new projects. Their approach allows them to replace what they produce and manage decline more effectively. In industry terms, this is measured through the reserves replacement ratio – how much new resource is added compared with what is produced. Norway consistently produces a higher reserves replacement ratio than the UK. Over the 5 year period 2019-2024, through exploration, Norway replaced on average 46% of the reserves that were produced, the UK however, replaced just 14%.“

“Today, the North Sea still provides over half of the UK’s oil and gas needs. With the right conditions, we can sustain production for longer, reduce exposure to imports, and manage the transition more securely. Without licensing and investment, the UK simply becomes reliant on overseas supplies sooner – regardless of demand falling.“

Claim: 93% of UK North Sea oil and gas has already been extracted, so new drilling makes little difference.

“Official projections show several billion barrels of oil and gas still expected to be produced between now and 2050. Independent analysis commissioned by OEUK shows that, with the right conditions, significantly more could be delivered from known projects and discoveries.“

“And even beyond that, the UK’s own regulator identifies large volumes of oil and gas in:

  • approved projects
  • existing discoveries
  • areas that haven’t yet been developed“

Pressure is mounting on the UK govt to approve the Rosebank and Jackdaw projects and ease exploration restrictions. Will it work?

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Is this a new low for the UK’s anti-oil mob? See this BBC article shared by JL Daeschler.

Campaigners against Rosebank, Britain’s largest untapped oil field, have told the UK government that approving the project would risk breaching international law.

They say profits would flow in part to the Israeli oil and gas company Delek Group, which the UN human rights commissioner accuses of “supporting the maintenance and existence” of illegal settlements in the West Bank.

Note that Delek is not a Rosebank partner, but is the majority shareholder in a 20% Rosebank partner, Ithaca Energy. The 80% owner and project operator is Equinor, which is 2/3 owned by the Norwegian govt. Apparently, neither Equinor nor Norway are troubled by Ithaca Energy’s 20% Rosebank share. (There is no indication that the BBC contacted Equinor prior to publishing the article.)

The most sensible quote in the article is from the govt of Israel which dismissed the accusations as “absurd and distorted.”

Which do left-wing activists hate more – oil or Israel?

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