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.
Bud's Offshore Energy (BOE) 