UK oil business looks both ways

On May 31, the UK government-industry task force spearheading initiatives to help sustain the country's offshore oil and gas industry, Pilot, rolled out the next fields for prospective development under Logic, its "satellite accelerator" scheme: the North Sea Don (Northeast, Southwest, South), and Don West fields.

On May 31, the UK government-industry task force spearheading initiatives to help sustain the country's offshore oil and gas industry, Pilot, rolled out the next fields for prospective development under Logic, its "satellite accelerator" scheme: the North Sea Don (Northeast, Southwest, South), and Don West fields.

The four UK Continental Shelf fields are thought to have about 180 million OOIP, a sizeable prize in an era where marginal tieback developments as small as 30-50 million bbl are now piquing operator interest.

According to Pilot's "enabler," Logic, first assessments suggest that a redevelopment of the fields, located over four blocks in around 500 ft of water, could produce around 35 million bbl of reserves from the Brent sandstone reservoir, with scope for developing further volumes from the Statfjord sandstone reservoir in the Don fields, from Don West, and from a westerly extension of Don to make up the bulk of uptapped reserves.

Develop or squander

Without further investment, Don, which is already in production under the operatorship of BP PLC, will likely yield less than 20 million bbl.

The satellite accelerator scheme, launched last year to breathe new life in to "subeconomic" or technically challenging fields, allows for industry investors to take a share in a field's reserves or production in return for the capital expenditure called for to bring such redevelopments on stream.

Chris Freeman, Logic's chief executive officer, said the Don fields' development was "a significant step forward for the satellite accelerator process" and applauded BP for championing "a collaborative and nonprescriptive way of engaging the industry to unlock value."

Interestingly, earlier the same day, Pilot, which is made up of 23 government representatives and oil industry chiefs, held an early morning presentation with a decidedly different agenda: diversification.

To a meeting of small and medium-sized oil and gas service and supply company heads, Pilot launched the findings of two studies commissioned by the UK Department of Trade and Industry as part of a strategy to generate £1 billion in new business for the sector by 2010.

The studies underscored that the future prosperity of the UK supply chain depends "not just on the buoyancy of North Sea activity but also on diversification and exports that will broaden the base of the industry and maintain jobs."

Diverse opportunities

Not surprisingly, renewable energies and environmental services are -seen as key technology transfer targets and top the list of markets into which specialist UK supply companies might make inroads.

Speaking at the event, Mike Straughen, managing director of AMEC Services PLC, said, "In particular, offshore wind and wave and tidal energy hold the greatest potential for diversification, offering the closest fit with the capabilities of the supplies industry," noting that the waste management sector alone, sometimes taken for granted by the wider oil and gas industry, was valued at £3 billion and expanding into resource management and recycling.

With the promise of diversification into alternative sectors and the technology-driven prolongation of the UKCS's unexploited reserves, the industrial reinvention for the province's Third Age-the term coined for the North Sea's maturity-is increasingly looking to be about finding a middle way between known and unknown.

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