10 comments on 20 new fields needed every year in the UK
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10 comments on 20 new fields needed every year in the UK
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If they are truly 'new' (in that they have not already been previously discovered, left behind and now look attractive at current oil prices), then that will be a minimum of 40 exploration wells per year. So the plan is year on year exploration in a very high cost environment at a time when oil service company costs, rig rates etc are all high?
If an Operator is going to spend serious money to drill exploration wells,then why not go looking for 'elephants' off Nigeria, Angola or elsewhere. Ok, so the UK is politically stable, but it looks increasingly that the elephants have been found.
If the oil price does drop significantly (which I doubt) then 20mboe fields become correspondingly less attractive.
It doesnt add up unless it becomes a UK strategic imperative with significant financial incentives.
No. Maybe this is why the Chancellor is grabbing what loot he can in taxes, knowing that the game is over and he is taking what he can before the operators scarper.
8 exploration 9 appraisal and 46 development wells
This brings the total exploration wells in 2005 to 41 due to a burst of 19 in the third quarter but apart from this quarter drilling activity only a little increasd over that of the last 5 years. It does not look like the sort of activity requires to run up the down escalator of decline in older fields and ever smaller new finds.
Exploration Wells and raw numbers of Mobile Offshore Drilling Units has dropped yearly up until the up-tick of last year. Fleet deployment and wells improved in 2005, but I think this is the 'last hurrah'.
A good description of 20 x 20 would be 'puddle sucking'.
I am assuming that 20mboe is the URR.
There is a global shortage of mobile offshore drilling rigs. The operators would be better sweating these MODU rig assets in an area of the world where you stand a chance of finding a 100mboe - 250mboe field with the added bonus of possibly hitting an elephant. (I am assuming an elephant is now about 0.5- 1Gboe these days).
I think the tail end of small fields will go undiscovered or get left behind unless:
-They are close to and have access to infrastructure
-They can be drilled from existing platforms
-Exploration costs are tax-offset.
-The tax regime is highly incentivised even at 100 US/bbl.
I think the majors have got bigger problems, bigger fish to fry. And anyway, are there really 20 new fields to discover each year, year on year, for, say even 10 years?
Sherrif:'Its the last act of a desperate man'.
Townsman: 'I dont care if its the 1st act of Henry the 5th... we are leaving'.