Despite Mature North Sea, UK Tackling Three Frontiers
by John Howes
London
The North Sea is a busy place these days. Despite being a mature oil province, the area is still a target for significant investment with a record number of fields being developed and a high number of operators continuing to apply for Annex B development permission—a trend that is likely to continue well into the new millennium.
According to statistics in the increasingly elaborate annual "Brown Book" (Development of the Oil and Gas Resources of the United Kingdom 1999), published in May by the UK Department of Trade and Industry, investment in the UK oil and gas sector last year rose to some £5.1 billion from £4.4 billion in the previous year. A record total of 132.6 million tons of oil was produced in 1998, along with 95.6 billion m³ of gas. The total income of the oil and gas sector in the year was some £17 billion.
As of 17 March 1999, a record number of 204 offshore fields were in production—109 oil fields, 79 gas and 16 condensate fields. Production commenced at 12 offshore oil/condensate fields during 1998—Gannet E in January, Galley in March, Mallard in April, Larch, Mungo, Schiehallion and Grant in July, Britannia in August, Heron and Monan in September, Flora in October, and Marnock (part of Marnock/Skua) in November.
A good measure of a sector's level of infrastructure to support future developments is the number of pipelines in use and being installed. During 1998, there were 36 submarine pipeline works authorizations for the construction of 424 submarine pipelines. Of course, the majority of these were infield flowlines associated with field development.
The future also looks promising. In 1998, a record number of 39 development plans were authorized—24 oil and 15 gas/condensate, and during this year discussions are expected to take place on a further 25-30 new and incremental development plans. On the drilling front, a total of 80 exploration and appraisal wells were drilled during 1998. These comprised 47 exploration and 33 appraisal wells, and these led to seven significant discoveries being announced.
New Frontiers (back to top)
The UK oil industry is active on three frontiers:
The first is the deep water, harsh environments, particularly the Atlantic Frontier in which oil companies, notably BP Amoco have been active in exploring and producing oil. Last year saw the start up of Schiehallion, the second oil field to be commissioned in the deep Atlantic Frontier waters, West of Shetland. This month, the Faeroes Islands announced that they were inviting bids for exploration.
The Santa Fe International drilling unit Monitor at work on Erskine Field.
The second frontier is the technological frontier. While modern technologies such as extended reach, multilateral drilling, smart wells, and 4D seismic have been applied to many wells in UK waters, it is perhaps developing technologies to overcome significant high pressure and high temperature (HP/HT) reservoirs that has been most characteristic. [See OGO's Technology Feature on HP/HT coming in July]
Development drilling in HP/HT gas condensate fields has proceeded more rapidly than predicted due to technology improvement, very thorough preparation, and the sharing of know-how across the companies involved. This has reduced the substantial cost of these wells in current projects.
An area to the north of Blocks 29 and 30 and the south of Blocks 22 and 23 have HP/HT hydrocarbon deposits, with the Erskine (Texaco) development, followed by Mallard and Heron (Shell) in 1998, breaking new ground in this area. Within the next 12 months, they will be joined by Elgin/Franklin (Elf) and Shearwater (Shell).
Reserves on Elgin/Franklin are estimated to be 60million m3 condensate and 50 billion m3 gas The reservoir exhibits pressures of approximately 1100 bars and temperatures of 190ºC . It will be developed using normally unmanned wellhead platforms on Elgin and Franklin which will be connected to a single production/utilities/quarters platform (PUQ) located on Elgin.
The Elgin wellhead platform will consist of a 2,715-ton, four-leg steel jacket supporting a 1,743-ton topsides. The Franklin platform will consist of a 2,093-ton topsides supported by a 2,800-ton jacket.
The PUQ platform is a jackup-style TPG 500 design, similar to that used by BP on Harding. It will be towed out to Elgin, where its legs will be lowered. Upon contact with the seabed, its 24,500-ton deck will be jacked-up by 34 meters. First production is scheduled for the year 2000 and is expected to continue until 2022.
The Shearwater gas condensate reservoir has pressures of 1000 bar and 360ºF temperatures. The HP/HT wells are over three miles long and subject to the additional presence of up to 30 ppm hydrogen sulfide (H2S), 3% carbon dioxide (CO2) and concentrated salt solution.
The £875-million project will consist of five development wells drilled through the nine-slot 2,500-ton, four-legged wellhead jacket, which was installed in mid-1997 as a drilling template. The wellhead platform topsides design contract is being fabricated at Heerema Hartlepool. This is bridge-linked to a central processing facility (CPF) 80 meters away. The 15,000-ton integrated deck, including compression module, flare tower, and accommodation module for 78 people will be supported by a 5,900-ton steel jacket fixed by eight 2.75-meter diameter piles (two for each leg) penetrating 43 meters into the seabed. Production startup is expected in June 2000.
The third and perhaps the most important frontier facing the UK or the international oil industry, however, is the economic frontier. With the reduced oil price, the North Sea industry is employing a number of strategies to bring on developments that ten years ago would have remained uneconomic.
Using infrastructure (back to top)
In earlier years, the UKCS was dominated by a few large fields however today, hydrocarbons are being produced increasingly from the medium and small size fields. A large proportion of these are small fields developed since 1990 with operators taking further advantage of available ullage in the existing infrastructure to bring on stream those fields which otherwise may not have been economically viable.
The exploitation of satellite fields from host platforms or other existing drilling centers continued in 1998. Such developments are direct beneficiaries of advances made in extended-reach drilling technology, which has permitted more outlying accumulations to be brought within reach of the existing infrastructure. A notable example is the Columbia E Terrace of the Ninian Field which started production in 1998 as the third such terrace so exploited.
BG Exploration & Production is also working on Easington Catchment Area (ECA) development. The £150 million first phase of ECA will involve the development of two gas fields, Neptune and Mercury tied back to BP's existing Cleeton platform on 42/29. These fields, with total reserves of 370 bcf gas lie between 25 and 30 miles off the Yorkshire coast in water depths ranging between 29 and 46 meters. The pipelines are planned to be laid in the second and third quarters of 1999, with first gas expected towards the end of 1999. Modifications to the Cleeton facilities to allow for the introduction of ECA gas will be undertaken by BP and AMEC.
The fields will be developed by a minimal, normally unmanned new riser tower platform on Neptune and a subsea production facility on Mercury. A £24 million contract for the engineering, procurement, fabrication, installation, and commissioning of the Neptune platform and ECA riser tower has been awarded to Brown & Root. The platform and riser tower is being constructed at Ardersier, Scotland.
This development scenario was selected due to the expected low level of water produced with the gas on Mercury. This meant that there was no need for water separation before the wellstream reaches Cleeton. Using a subsea installation has the benefit of reducing any interference with other activities in the area, such as shipping. Neptune will need a platform, however, so that the higher levels of water coming out with the gas can be processed. A small, unmanned platform will house the control equipment for both fields.
Installation work started in March 1999, with first production scheduled for the fourth quarter of this year. By adopting the fast-track approach of performing development studies and conceptual engineering in parallel with commercial negotiations, the ECA partners have reduced the time from DTI sanction to first production to less than one year.
Collaboration (back to top)
Another strategy is collaboration, where a number of oil companies pool resources and work together in the joint development of a field or number of fields. Such collaboration offers opportunities to reduce overheads and to improve performance necessary to help develop the remaining reserves in the UKCS, most of which lies in small and complex reservoirs.
In the recent Britannia Field development, Chevron and Conoco pooled their talents to bring the largest condensate discovery in the North Sea on stream.
Meanwhile, Shell and BP- led license groups collaborated to bring seven oil and gas fields on stream in 1998 in a £1.6 billion development called ETAP (Eastern Trough Area Project). The high degree of cooperation between them helped to bring the overall project to completion at much lower cost.
One example currently being carried out is the Triton project involving six partners jointly developing three neighboring oil fields. The Triton project consists of three fields, Bittern and Guillemot West and Northwest, which will be developed using an FPSO operated by Amerada Hess. It will have processing equipment capable of handling 105,000 bbl of oil and 140 million cf/d gas and can store 630,000 bbl of crude oil. It will be capable of injecting up to 125,000 b/d water. The 105,000-ton hull entered the River Tees in December 1998 to install processing equipment.
Field Approvals (back to top)
Development Plans currently authorized in the past 12 months:
- Judy. (oil)………………………….January
- Columbia E Terrace (oil)………….January
- Renee (oil)…………………………February
- Rubie (oil)………………………….February
- Rob Roy (oil)………………………February
- Ness South (oil)……………………March
- Bittern (oil)…………………………March
- Guillemot West (oil)……………….March
- Guiliemot Northwest (oil)………….March
- Nevis South (oil)……………………March
- Nevis North (oil)……………………March
- Grant (oil)…………………………..April
- Delilah (gas)………………………..April
- Flora (oil)…………………………...April
- Buckland (oil)………………………April
- Kittiwake (oil)……………………...April
- Caister/Murdoch System (gas)……...July
- Merlin (oil)………………………….August
- Europa (gas)…………………………August
- Sinope (gas)…………………………August
- Callisto (gas)………………………..August
- Vampire (gas)……………………….October
- Kyle (oil)……………………………October
- Gannet G (oil)………………………November
- Dalton(gas)………………………….November
- Mercury (gas)……………………….November
- Neptune (gas)……………………….November
- Everest (con)………………………..November
- Lomond (con)……………………….November
- Galley (oil)…………………………..December
- Brown(gas)…………………………..December