UK Regulator Outlines Plan To Boost Drilling

The UK’s upstream regulator the Oil & Gas Authority (OGA) has called for more offshore wells to be sunk to reverse a decline in drilling and maximise oil and gas recovery in the North Sea.

The regulator said in a report on July 30 that maximising the well-value cycle would support government’s Maximising the Economic Recovery UK Strategy and Vision 2035 goal of generating £140bn ($170bn) in extra revenues from offshore oil and gas operations. Some 44bn boe of oil and gas have been recovered from the UK’s continental shelf to date, it said, although there is still a potential 10-20bn boe left to exploit.

Increased well activity and improved well management are vital for delivering the government’s goal, the OGA said. The agency will work with industry to understand how decisions are made regarding drilling. It will also work with operators and the supply chain to boost collaboration, including the greater sharing of rigs.

In addition, the OGA will commit itself to maximising the well value cycle offshore “through effective regulation, promotion and by using its influence with licensees, the supply chain and relevant bodies.” It also advised improved performance of activities across this cycle, from well design to decommissioning. The aim will be to cut costs and improve recovery.

According to the watchdog, in order to maintain and optimise production, and therefore increase recovery, the well value cycle requires 45-50% of total capital expenditure and abandonment and decommissioning spending, as well as a significant portion of operational costs.

“It is clear from the data the OGA has published that there is a requirement for a step change in increasing new well activity and performance and a requirement to improve management of existing well-stock,” the agency’s operations director, Gunther Newcombe, said in a statement.