Economic Report 2000 Index

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Meeting the Challenge Exploration Statistics The analysis from Wood Mackenzie illustrated in Figures 17, 18 and 19 highlight the fact that although the UKCS has recorded a large number of discoveries in the 1996-1999 period, in combination with a respectable success rate of 21%, the average discovered volume is low at around 30 million boe. The measured exploration or finding success rate of 21% is no guarantor of commercial success; this is typically much lower and has averaged around 11% in recent years. However it is encouraging to note that the commercial success rate in the UKCS has remained stable in recent years despite the maturity of the basin. Of particular significance is Figure 19 which shows the largest discovery in the period; this provides the essential economic factor which attracts and sustains industry interest. One of the key measures of upstream industry performance is the imperative of reserve replacement. Two UK "super majors" (BP and Shell) need to discover in excess of 2.5 billion boe per annum from their global operations to achieve this. Whilst the UKCS can make a valuable contribution, the commercial necessity of chasing "world class" exploration prospects, outside the UKCS, is clear. The analysis demonstrates that the UKCS is unable to offer the scale of discovery volumes available in Norway, Angola and Gulf of Mexico. It is apparent from these metrics that what sustains the interest for all UKCS participants and prospective entrants is the prospect of "value rather than volume", and ready access to a skilled workforce and resources.