The ups and downs of offshore exploration
06 July 2010
North Sea operators are looking forward to another period of boom operations with the discovery one of the largest finds in years following shortly on a government announcement of record levels of interest in new developments in the UK sector. Initial data from the Catcher East prospect field in the central North Sea suggests it is connected to an earlier discovery, which indicates a larger single field than had been estimated before drilling.
A bright future for the central North Sea
An offshore consortium including Premier Oil, Nautical Petroleum and EnCore Oil has made what looks to be one of the largest North Sea oil discoveries in many years. Early analysis shows that the Catcher fields could contain up to 300m barrels of oil, 40% of which could be recoverable. Added to this, surrounding prospects could hold significant further resources, which Steve Jenkins, Nautical's chief executive, believes will lead to a major development. North Sea discoveries over the past decade have averaged only 25m barrels.
The role of North Sea oil and gas in securing the UK’s future energy supplies was underlined last week in Aberdeen by Energy Minister Charles Hendry, as he approved the development of Apache’s Bacchus oil field. Hendry also announced record levels of interest in new developments in the North Sea as 356 blocks have been applied for in the latest licensing round. The largest number of blocks applied for since the first licensing round was launched in 1964.
The minister commented: "The North Sea remains an important hub for investment and will continue to be at the heart of the UK's energy security for years to come." Alluding to BP’s problems in the Gulf of Mexico, he added that "this approval is in accordance with the UK's stringent safety and environmental regimes in the North Sea, and shows that there are still plenty of opportunities for developments in UK waters."
The costs incurred by BP over the Gulf oil spill have now passed $3 billion. The total includes the cost of containing the spill and cleaning up the oil as well as the cost of drilling relief wells. The total also includes the $147m paid out in compensation to some 47,000 claims for payment This figure is thought to be about half of the claims submitted by those affected by the spill but it is clear that the total cost of compensation will be much higher.
Meanwhile the US authorities including the Chemical Safety Board (CSB) are investigating the causes of the blowout at the Macondo well, operated by BP in the Gulf of Mexico. CSB has a justified reputation for conducting thorough investigations and producing valuable recommendations for future safe operation of process plant.
It is to be hoped that CSB’s recommendations can be finalised before drilling proper starts up in the central North Sea as these new discoveries are commercialised.