UK offshore:Rystad Makes Grim UKCS Production Prediction

Recommended Posts

Rystad Makes Grim UKCS Production Prediction




Hydrocarbon production will never again exceed two million barrels of oil equivalent per day (boepd) on the United Kingdom’s Continental Shelf (UKCS).

That’s according to Rystad Energy’s latest projections, which follow what the company called a “jaw-dropping” downgrade of Hurricane Energy’s Lancaster field. Rystad Energy now predicts that UKCS hydrocarbon production will reach a maximum of 1.7 million boepd in 2035 before dwindling to “nearly nothing” by the middle of the century.

UKCS production stood at 1.65 million boepd last year and is expected to fall to 1.59 million boepd in 2020. Output has dropped steadily since its peak of 4.3 million boepd in 1999 and has never exceeded two million boepd after 2010. Rystad Energy noted that promising exploration results by Hurricane Energy in fractured basement reservoirs, previously untapped in the UK, were expected to revive the UK’s output to 2.1 million boepd by 2035 but added that those hopes have now “been dashed”.

Rystad Energy outlined that the recent downgrade of the Lancaster field revealed that the reservoir is more complex than previously thought. The company said the result was a “drastic” resource downgrade for Hurricane Energy’s entire asset portfolio, as all its resources lie in fractured basement reservoirs.

The development was described by Rystad Energy as a “major blow” to the outlook for the UK’s future petroleum production, as fractured basement resources were estimated to account for nearly one-fifth of the future oil and gas output from the UKCS. The downgrade, which was announced in Hurricane Energy’s half year results statement last month, slashed the company’s estimated resources by nine-tenths and triggered the company’s stock to plummet, Rystad Energy highlighted.

“The entire UKCS long-term production forecast has been impacted quite significantly,” Olga Savenkova, an upstream analyst at Rystad Energy, said in a company statement.

“The main takeaway here is that we may never again see any significant production upsurge in UKCS production. A possible game-changer could now only be a development of technical skills for producing from fractured basement reservoirs to increase the recovery factor,” Savenkova added.

In Hurricane Energy’s half year results statement on September 11, Steven McTiernan, the chairman of the company, said 2020 was proving to be a “hugely challenging” year for the business.

Rystad Energy highlighted that basement plays on the UKCS were largely ignored in terms of evaluation and investment until Hurricane Energy emerged in 2004. Lancaster, which is 100 percent owned by Hurricane Energy, is the UK's first producing basement field.

Basement reservoir developments are recognized throughout the world as oil-bearing and commercially productive, yet remain largely overlooked, according to Rystad Energy, which noted that, currently, more than 100 fields are producing from basement reservoirs but the volumes produced are comparatively small.

Hurricane Energy was established to discover, appraise and develop hydrocarbon resources from naturally fractured basement reservoirs, the company’s website states. The company has drilled 11 wells across its licenses since 2009, including five on the Lancaster field. Rystad Energy describes itself as an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry.

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.