Reserves stewardship and recovery

Figure 23: Estimate of UKCS Reserves and Exploration Potential (1.1.06)

13 projects were given development approval in 2005.  14 new fields were brought into production in 2005, comprising 9 subsea developments and 5 new platforms. The DTI has now replaced the annual field report with a new “stewardship process” which was launched in April 2005. This has improved understanding of development trends and identification of further opportunity potential. The returns for 2006 was kicked off in February, which should allow insights to feed through into 2007 Joint Venture plans and budgets fixed in the autumn.

Reserves replacement by exploration & appraisal drilling

Exploration and appraisal activity has continued to increase over recent years with 78 E&A wells drilled in 2005, a 25% increase on the 63 drilled in 2004. Projections suggest that this high level will be sustained beyond 2006 constrained by rig availability.

Figure 24: UKCS Exploration & Appraisal Drilling

However, E&A activity is competing for rig slots with development drilling and production, with rig utilisation already at 100% for jack-ups and 86% for semi-submersibles. There is potential for the rig market to become an even bigger constraint on activity if rigs are attracted away from the UKCS to basins with more material prospects or more stable fiscal regimes.

The successful 23rd licensing round in 2005 saw a record 152 licences awarded (76 Promote licences, 6 Frontier and 70 Traditional). It attracted 24 new entrants to the UKCS and included 69 blocks previously released from earlier licences under the DTI’s ‘fallow blocks and discoveries’ initiative.

Figure 25: Number of licences awarded through licensing rounds