Industry Trend Analysis - Near-Field Momentum Builds - JAN 2018
BMI View: Step-out developments from existing fields targeting proven resource bases will continue to be a key trend in the North Sea in the coming years, as operators attempt to mitigate declines in production in the most cost-effective way.
A drilling contract for up to 12 additional wells in the northern areas of the Nexen-operated Buzzard field has been signed with Maersk Drilling; the programme is planned to commence around July 2018, running for approximately eight months. The Buzzard field is currently the largest producing field in the UK, with output in 2016 of just over 150,000b/d. The continuation of these production levels is important not only to the UK sector as a whole, but to the Brent oil price benchmark, which is suffering from reduced liquidity as output from participating fields declines. The step-out drilling will support and potentially boost the levels of production at Buzzard for longer, with output having already declined from peak output levels seen in the several years after start-up in 2007.
We have argued previously that the lower oil price environment will incentivise smaller tie-back opportunities over more capital intensive greenfield projects (see ' Tie-Backs, Small-Scale Projects To Be Increasingly Favoured ' , June 5); the cycle of greenfield projects given the go ahead in the previous high oil price environment is set to be completed with the start-up of the Clair Ridge project next year. Tie-back projects have been increasingly viable in Norway, where the comparative resurgence in oil production is being driven by a pipeline of field developments using a tie-back concept to an existing production facility (see 'FIDs Primed For The Taking', 16 February).
|Additonal Wells To Limit Output Decline|
|Buzzard: Crude Oil Producton, 000b/d|
|Source: BEIS, BMI|