Remaining potential and opportunities on the United Kingdom Continental Shelf

(UKCS) and the need for New Entrants

Remaining potential and opportunities on the United Kingdom Continental Shelf

(UKCS) and the need for New Entrants

Jim Munns DTI Manager

Promote UKCS Jim Munns DTI Manager

Promote UKCS Houston Geological Society December 2001

London PESGB January 2002

Aberdeen PESGB March 2002

Houston Geological Society December 2001

London PESGB January 2002

Aberdeen PESGB March 2002BritishGeologicalSurvey

Why the UKCS?Why the UKCS?

• 27 BBOE Yet to Find• 2001 BUZZARD largest UKCS

discovery since 1993• Deep water Atlantic Margin

under-explored• Subtle traps and non-

conventional plays in the North Sea

• 35% E&A well success rate

• 27 BBOE Yet to Find• 2001 BUZZARD largest UKCS

discovery since 1993• Deep water Atlantic Margin

under-explored• Subtle traps and non-

conventional plays in the North Sea

• 35% E&A well success rate

Why the need for new companies?

Why the need for new companies?

• To meet government/industry aspirations (PILOT)

• E&A activity has been low for the last three years

• Loss of active exploration companies due to mergers (funding)

• Not replacing production• Maximise ultimate recoverable

reserves

• To meet government/industry aspirations (PILOT)

• E&A activity has been low for the last three years

• Loss of active exploration companies due to mergers (funding)

• Not replacing production• Maximise ultimate recoverable

reserves

Main basins

UKCS

Main basins

UKCSSouthern

Gas Basin

AtlanticMargin

Irish Sea

Rockall Trough

Central Graben

Viking Graben

NorthSea

Condensate field

Gas field

Oil field

Licensed block0 200 km

StratigraphyStratigraphy

Britannia, Captain, Scapa

Continental (fluvial)

Leman, Indefatigable, Auk

Kyle, Joanne, MacharForties, Andrew, FoinavenFrigg, Gryphon

Statfjord, Wytch FarmHewett, Morecambe, Judy

Beryl, Beatrice, BrentFulmar, Hutton, Millar

Argyll

Trent

Buchan, Clair

Murdoch, Schooner

vvvv

vvvv

vvv

vvvv vvvv

PRINCIPAL LITHOFACIES

Volcanics

Continental (aeolian)

Evaporite

Carbonate

Delta/fluvial

Shallow marine

Basinal marine

Principal sourcerock interval

UPPERCRETACEOUS

LOWERCRETACEOUS

JURASSIC

TRIASSIC

DEVONIAN

CARBONIFEROUS

PALEOGENE

NEOGENE

PERMIAN

‘PILOT’ Joint Industry Government initiative - Vision

for 2010

‘PILOT’ Joint Industry Government initiative - Vision

for 2010

• Production at 3 million Production at 3 million boe/dayboe/day

• Investment of £3 billion/yrInvestment of £3 billion/yr• 100,000 more jobs than 100,000 more jobs than

would otherwise have beenwould otherwise have been• Prolonged self sufficiencyProlonged self sufficiency

• Production at 3 million Production at 3 million boe/dayboe/day

• Investment of £3 billion/yrInvestment of £3 billion/yr• 100,000 more jobs than 100,000 more jobs than

would otherwise have beenwould otherwise have been• Prolonged self sufficiencyProlonged self sufficiency

Projected UKCS production from discovered reserves (mmboe)

Projected UKCS production from discovered reserves (mmboe)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Possible new developmentsProbable developments possible upsideApproved fields possible upsideProbable new developmentsApproved fields 2PSuggested target profile

Gas

Oil

Production from already discovered fieldsProduction from already discovered fields

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018

Oil E

qu

ivale

nt

(m

mb

oe/d

ay) Gas - Possible

Oil - Possible

Gas - 2P

Oil - 2P

Already produced Future production

UKCS Offshore oil productionUKCS Offshore oil productionby reserve rankingby reserve ranking

27 8 12 14 15 18 20

25 27 30 3236 38

4650 48

56

7076

81

99

113

124

133135

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 *

Million

barr

els

a d

ay

0

20

40

60

80

100

120

140

160

Nu

mb

er

of

pro

du

cin

g fi

eld

s

Other offshore approved oilfieldsTop 10 largest approved oilfields

Number of fields.

Opportunities for Independents?Opportunities for Independents?

• Mix of frontier and mature basins

• 35% E&A Success rate• Recent fall-off in E&A activity • Well developed infrastructure• Portfolio of opportunities

includes exploration, undeveloped discoveries, and “breathing life” into mature fields

• Mix of frontier and mature basins

• 35% E&A Success rate• Recent fall-off in E&A activity • Well developed infrastructure• Portfolio of opportunities

includes exploration, undeveloped discoveries, and “breathing life” into mature fields

Exploration wells vs. oil price Exploration wells vs. oil price

Exploration Wells Number of discoveries

0

50

100

150

200

250

0

5

10

15

20

25

30

35

40$

197

41

975

197

61

977

197

81

979

198

01

981

198

21

983

198

41

985

198

61

987

198

81

989

199

01

991

199

21

993

199

41

995

199

61

997

199

81

999

200

02

001

0

25

50

Brent Crude Oil Price

Average discovery field sizeAverage discovery field size

0

100

200

300

400

500

600

70019

65

1970

1975

1980

1985

1990

1995

2000

Ave

rage

fiel

d di

scov

ery

size

(M

mbo

e)

Data supplied by IHS Energy Group

Some specific discoveries....Some specific discoveries....

0

100

200

300

400

500

600

70019

65

1970

1975

1980

1985

1990

1995

2000

Ave

rage

fiel

d di

scov

ery

size

(M

mbo

e)

Data supplied by IHS Energy Group

Brit

ann

ia

Foi

nav

en

Bitt

ern

Buz

zardM

iller

Ca

pta

in

Alb

a,S

cott

Ne

lson

Sch

ieh

alli

on

?

AtlanticMargin

NorthSea

IrishSea

RockallTrough

Condensate pipeline

Gas pipeline

Oil pipeline

InfrastructureInfrastructure

Future Potential (maximum case)

Future Potential (maximum case)

An estimated maximum 27.2 BBOE Yet to Find

Cumulative production

Remaining recoverablereserves (proven + possible)

Maximum estimate of undiscovered recoverable reserves

250 km

Scotland

IrelandIRISH SEA

NORTH SEA

England

Shetland

FaroeIslands

Permian or younger paleohighField

Atlantic Margin

North Sea OilProvince

Southern Gas Basin,Irish Sea & Onshore

12.05.4

9.8

UK Undiscovered Reserves – Maximum CaseUK Undiscovered Reserves – Maximum Case

Yet to find Maximum case: 27.2 BBOE

An estimated minimum 3.9 BBOEYet to Find

Cumulative production

Remaining recoverablereserves (proven + probable)

Minimum estimate of undiscovered recoverable reserves

Ultimate RecoverableReserves 43.5 BBOE

Future Potential (minimum case)

250 km

Scotland

IrelandIRISH SEA

NORTH SEA

England

Shetland

FaroeIslands

Permian or younger paleohighField

Atlantic Margin

North Sea OilProvince

Southern Gas Basin,Irish Sea & Onshore

1.51.6

0.8

UK Undiscovered Reserves – Minimum case

Yet to Find Minimum Case : 3.9 BBOE

Source Rock DistributionSource Rock Distribution

Jurassic mudstones Jurassic mudstones – uncertain distribution Carboniferous coal measuresCarboniferous basinal mudstones

?

Regional cross-section

AGE NORTH SEA OIL PROVINCE GAS PROVINCENEOGENE

PALEOGENE

CRETA-CEOUS

JURASSIC

TRIASSIC

PERMIAN

CARBON-IFEROUS

DEVONIAN

PRE-DEVONIAN

PO

ST-

RIF

T

SYN-RIFT

PR

E-R

IFT

?

Sandstone (fluvial/aeolian) Sandstone (basin-floor) EvaporiteSandstone/mudstone/coal (deltaic) Carbonate VolcanicsSandstone (shallow-marine) Mudstone Basement

Source rock unitProducing reservoir unit

Focus of future activityFocus of future activity

•Atlantic Margin Play•Ur.Jurassic/Lower Cretaceous

stratigraphic play•Mesozoic basin margin play•Deep basin axis play•Lower Permian pinchout play•Palaeogeomorphic play

•Atlantic Margin Play•Ur.Jurassic/Lower Cretaceous

stratigraphic play•Mesozoic basin margin play•Deep basin axis play•Lower Permian pinchout play•Palaeogeomorphic play

Atlantic MarginAtlantic MarginUKFaroesNW Faroe-Shetland Basin SE

10 km

?? ??

Paleocene

Basin-floor sandstone

Lower Eocene to RecentUpper Paleocene to Lower EocenePaleogene basalt

S

Source rock S

0

2

4

8

10

Upper CretaceousLower CretaceousJurassicPerm ian to TriassicPre-Perm ian undifferentiated

P

P

P P

Principal playP

Sea Bed

Km

Block 213/10: Faroe-Shetland BasinMid-Eocene sandstone reservoir

8800

8300

85008600

8700

8800

8900

8700

8600

8500

8400

960097

0095

009400

9300

9000

9200

9100

8900

8500

Horizon: Top Mid-Eocene basin floor fan (feet)

Limitof fan

3°1

2W

61°40N

214/6

Line of section

UK

213/10

3°0

0W

61°50N

FAR

OE

S 5 km

15000

5000

10000

0 feet

PALEOCENE

MID-EOCENEBASIN FLOORFAN SANDS

Probabilistic: Determ inistic:

950 - 1,700 - 2,800 bcf1,700 bcf

Estim atedReserves

SEA BED

Atlantic Margin PlayAtlantic Margin Play

Atlantic Margin PlayAtlantic Margin Play

3.5

NW SE2.0

TWT(secs)

2.5

3.0

Sea bed

Opal Transition

Eocene to Oligocene

Eocene basin-floor fan

Top Caledonia Fan

Eocene213/10 prospect

1 km

Mid-Eocene basin-floor fan sandstone targetSeismic line courtesy of Fugro-Geoteam AS

Central North SeaCentral North Sea

Neogene to QuaternaryEocene to Oligocene

Upper Jurassic

PaleoceneUpper CretaceousLower Cretaceous

Middle Jurassic

Triassic (fluvial reservoir facies)Triassic (floodplain facies)Upper Permian (evaporites, minor carbonates)Upper Permian (aeolian, fluvial facies)Ordovician to Carboniferous

WSW ENE0

West Central Graben East Central Graben

1

2

6

7

8

Dep

th (

km)

0 10 km

Proven hydrocarbon-bearing play

12/23

9000

9000

7000

8000

Smith BankHigh

Lin

e of sectio

n

3A

Horizon: near top Kim m eridgian (feet)1 km

58°10N

2°36

W

2°2

4W

Block 12/23: Moray Firth Basin

Probabilistic: Deterministic:

165 - 370 - 695 mmbo330 mmbo

EstimatedReserves

StratigraphicColumn

5000

10000

0 feet

CRETACEOUS

TRIASSIC

UPPERJURASSIC

BURNS SST basin-floorsandstones

PERMIAN

L-M JURASSIC

v v v v

Dep

th T

VD

SS

Upper Jurassic stratigraphic play

Upper Jurassic stratigraphic play

Upper Jurassic stratigraphic play

Upper Jurassic stratigraphic play

2.0

1.0

1.5

TW

T(s

ecs)

1 km

Prospect 12/23

NNW SSE

1 km

Amplitude anomaly

Top Jurassic

Top Triassic

Instantaneous amplitude section: prospect 12/23. Updip pinchout of Ur Jurassic basin-floor

sandstonesSeismic line courtesy of Fugro-Geoteam AS

8700

8800

8800

8700

86008500

8400

8400

8800

8900

8900

9000

9000

9000

9050

9500

Burns SandstoneMember absent

Burns SandstoneMember absent

1

1

2

2

H

0°30

W

0°24

W

0°18

W

Moray FirthBasin

Horizon: near top Jurassic 1 km

20/8 20/9

StratigraphicColumn

SEA BED

5000

10000

0 feet

EOCENE TORECENT

PALEOCENE

CRETACEOUS

TRIASSIC

JURASSIC

BURNS SST

Dep

th T

VD

SS

Undeveloped discovery: well 20/8-2Late Jurassic basin-floor sandstone reservoir

Estimated reserves: 30 - 100 mmbo

Line ofsection

Mesozoic basin margin play

SW NE

20/8-2 oil discovery

20/8-2 20/9-2 20/9-1

1 km

1.5

0.5

TW

T (

secs

)

2.0

2.5

3.0

Eocene

Paleocene

U. Cretaceous

L. Cretaceous

Devonianand older

Permo-Triassic

Jurassic

H

Mesozoic basin margin play

Updip pinchout of U Jurassic basin-floor sandstones

Deep basin (HPHT) playDeep basin (HPHT) play

North Sea Oil Province:all fields

North Sea Oil Province:

HPHT fields

HPHT play area

HPHT play area

Paleocene3 secs

4 secs

5 secs

Eocene &younger

Base JurassicIntra-TriassicTop L Permian

Cretaceous

Deep basin (HPHT) playDeep basin (HPHT) play

'Seismic data sample supplied courtesy of Veritas DGC Limited'

6km offset 2D Seismic Data data Acquired Q4 2000

Upper Permian Zechstein evaporites - regional seal

Carboniferous - gas source;reservoir in north of basin

Permian aeolian sandstone - reservoir

Permian mudstone and evaporite - seal

0

1

Su

bs

ea d

epth

(k

m)

20 km

SW NECleaver

Bank HighSole Pit Basin

East MidlandShelf

Tertiary - Quaternary

Upper Triassic

Jurassic

L Triassic

L Cret.

U Cretaceous

2

3

4

Proven hydrocarbon-bearing play

Southern Gas BasinSouthern Gas Basin

Carboniferous and older

Lower Permian aeolian margin play

Lower Permian aeolian margin play

Dominantwind

direction

NSabkha / Silverpit

lake margin

C a r b o n i f e r o u s

Palaeotopographic high with thin, patchy

aeolian sands preserved

Leewardaccumulation of

aeolian sandsProspective reservoir

Post-depositional

tilt

Windwardaccumulation of

aeolian sandsProspective

reservoir

Palaeogeomorphic play

1 km

Atlantic Margin & North Sea Oil Province

Heavy Oil on the UKCSHeavy Oil on the UKCS

• Developed Fields and Fields Under Development - 3068 MMB stooip• Significant Discoveries – 1859 MMB stooip• Other Discoveries –

1885 MMB stooipProspects - 2000 MMB stooip

• Total 8812 MMB STOIIP

Developed Fields

Significant Discoveries

Other Discoveries

Prospects

Strategic EnvironmentalAssessment

Strategic EnvironmentalAssessment

Future Programme Future Programme

7

8

6

5

4

3

2

2

1

Summary – why the UKCS?Summary – why the UKCS?

• 27 BBOE Yet to Find• 2001 BUZZARD largest UKCS

discovery since 1993• Deep water Atlantic Margin

under-explored• Subtle traps and non-

conventional plays in the North Sea

• 35% E&A well success rate

• 27 BBOE Yet to Find• 2001 BUZZARD largest UKCS

discovery since 1993• Deep water Atlantic Margin

under-explored• Subtle traps and non-

conventional plays in the North Sea

• 35% E&A well success rate

Conclusions

• Full spectrum of opportunities remain

• Need to make the UK a better place to do business – stable, responsive, transparent, competitive

• Want to get licenses in hands of those who are ‘hungry and innovative’ – Brian Wilson (UK Energy Minister)

Why the UKCS?Why the UKCS?

AcknowledgementsSue Stoker and Don Cameron of the BGS for

the mappingFugro-Geoteam,Veritas for providing seismic data IHS Energy, Wood MacKenzie and ActisGeoscience for providing graphical dataColleagues at the DTI for their review of the data and presentation material

AcknowledgementsSue Stoker and Don Cameron of the BGS for

the mappingFugro-Geoteam,Veritas for providing seismic data IHS Energy, Wood MacKenzie and ActisGeoscience for providing graphical dataColleagues at the DTI for their review of the data and presentation material