WorldOil

Active year in UK continental shelf amid market and legislative uncertainties

The year 2007 has been another active year in the UK Continental Shelf (UKCS). Exploration and appraisal drilling has been running at slightly higher levels than those achieved in 2006, while development drilling has been slightly below last year’s level. A substantial number of new fields have come onstream, including Buzzard Field in the outer Moray Firth with estimated recoverable reserves exceeding 500 million bbl. Escalating operating costs. While high oil prices have been beneficial for production revenues, the operating environment has not been unambiguously rosy with continuing cost escalation. In the central North Sea the lifetime development and operating costs of a new field now exceed $25/boe. In the northern North Sea they now exceed $27/boe, while in the Southern Gas Basin, traditionally a low-cost area, the unit field costs exceed $20/boe. The result is that some potential development projects are being re-assessed. This is particularly the case with gas fields...