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18 June 2018
The Oil and Gas Authority ("OGA") released its reports "UKCS Technology Insights" and the "SNS Salting Study" on 4 April 2018. The reports focus on current work taking place in the industry to develop technical solutions to maximise economic recovery of UKCS hydrocarbon resources ("MER").
The oil and gas industry is aware of the importance of technology – its development has been crucial to exploration and production over the last fifty years. In order to deliver MER UK and in order to comply with the legally binding MER UK Strategy, licence holders are required to ensure that technologies, including new and emerging technologies, are deployed to their optimum effect.
As part of last year's Stewardship Survey, sixty-three UKCS operators submitted their technology plans to the OGA. The plans submitted by the companies included not only an insight into their technology portfolios, but also included strategies to access further required technologies for MER.
The OGA's "UKCS Technology Insights" is an update on progress towards those goals. Over three hundred technologies were reported across the asset lifecycle from seismic to asset management and decommissioning. From those reports, OGA has concluded there is a requirement for innovative solutions, with over 45% of the technologies listed as under development and not yet fully tested. The report also suggests a reluctance by the majority of the UKCS operators (70%) to adopt technologies for which there was insufficient experience.
The report also showed a decline in investment in Research & Development (R&D). In 2016, UKCS operators spent a total of £185 million on R&D and field pilots. This shows a decline of 36% in investment from before the oil price crisis. Only 11% of the respondents, comprising a small group of what OGA describes as 'leading' operators, accounted for 85% of this investment in technology. 70% of the operator respondents made no investment in R&D and instead relied solely on the supply chain for their technology needs.
Through the comparison of individual operators' plans, the report shows that many existing technologies could be more widely utilised. The report recommends greater collaboration between operators on developing novel technologies of common interest and better sharing of knowledge and experience in order to scale up the use of these technologies to the wider benefit of the UKCS.
The report concludes that properly realising this technology could have significant benefits, particularly in terms of hydrocarbon resource recovery. The OGA estimates that the remaining recoverable hydrocarbon resources from the UKCS range between 10 and 20 bn boe. Furthermore, the report states that the emerging technologies also represent strong export potential for the UK supply chain. With the knowledge of these potential benefits, the OGA continues to look to develop a shared technology strategy for the UKCS, supporting Vision 2035, and a forum of industry technology leaders to facilitate communication on technologies and sharing experience.
In a demonstration of OGA's determination to encourage collaboration in the UKCS, another recently published report, the SNS Salting Study 2017, draws together data from seven Southern North Sea (SNS) operators to evaluate the extent of self-scaling salt deposition across the SNS, the effectiveness of current treatment options and methods of mitigation. The study also established a view on production losses in the SNS due to salting. The report found that at least one fifth of all producing fields in the SNS are likely to be affected by salt deposition and that SNS production efficiency is estimated at 64%. This is the lowest in the UKCS areas (according to OGA's 2016 UKCS Stewardship Survey). Consequently, and unsurprisingly, OGA's report therefore recommends that gas operators in the SNS work together to reduce the impact of salting on production, including by the establishment of a forum for the dissemination of best practice on the subject.
These studies have highlighted the need for greater communication across the industry and have initiated the process of facilitating this communication. If effective, this will lead to wider utilisation of new and existing technologies and a more informed and effective approach to salt management, with consequent improvements to productivity.
For further information on this topic please contact Judith Aldersey-Williams or Valerie Allan at CMS Cameron McKenna Nabarro Olswang LLP by telephone (+44 1224 62 20 02) or email (firstname.lastname@example.org or email@example.com ). The CMS Cameron McKenna Nabarro Olswang LLP website can be accessed at cms.law.
This update has been reproduced in its original format from Lexology – www.Lexology.com.
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