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Page added on April 10, 2017

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Is Britain’s ‘largest oil discovery in decades’ really all that?

Geology

A large oil find has been declared 60 miles west of Shetland, off the north coast of Scotland. It’s being described as the UK’s “largest undeveloped discovery”. Taken at face value, this is exciting news for an industry still reeling after the oil price collapse of the past few years (environmentalists though are less enthusiastic).

The discovery was made by Hurricane Energy, a specialist exploration firm, which announced that its Halifax well had found large amounts of oil. It said it had also successfully undertaken a production test in which oil flowed at an impressive rate. This find may even be connected with a previous discovery nearby (the Lancaster field) and hence be part of one large accumulation of nearly a billion untapped barrels.

Hurricane Energy specialises in trying to extract oil from so-called fractured “basement” reservoirs. While most oil, including most North Sea oil, is found within sedimentary rocks such as sandstone, these basements occur when oil gathers in the natural cracks (or fractures) between impermeable igneous rock. In this specific case, Hurricane was actively searching along the Rona Ridge – a prominent seabed feature which hosts several oil fields.

This is undoubtedly an encouraging result for the UK oil industry as it seeks to extend the life of a mature basin characterised by ever diminishing resources. However, it is important to underline that there are major geological hurdles still to overcome and the oil can’t yet be considered potential, probable or proven reserves, all of which have strict statistical and commercial definitions.

An oil tanker makes its way through the Shetland Isles. Image: Ronnie Robertson/Flickr/creative commons.

Although fractured reservoirs have been successful elsewhere in the world, most notably in Vietnam and Yemen, this would be a first in the UK. The rocks around Shetland are very dense, and it’s particularly hard to work out how much oil is found in the narrow, open fractures in between them.

Success is likely then to be dependent on the fractures, which not only need to be significant but also suitably oriented for a directional drill bit to intersect them. Fractured basements are notorious for fast depletion on production as the fractures are drained quickly, and such fields consequently commonly have a shorter shelf life.

It is also worth remembering that no basement has been shown to work elsewhere in the North Sea to date. Concerns over economic viability mean the most notable discoveries at Cairngorm and at Bagpuss have yet to be developed. Hurricane will need to conduct an extended well test to demonstrate sufficient flow for the field to be feasible in the long term. Also, more drilling will probably be required to ascertain whether the Halifax oil exists in one large reservoir or in several smaller accumulations. The latter is much harder to develop.

Oil type

The billion barrels quoted in the media is certainly an eye-watering discovery – especially now, after oil firms have been scouring the North Sea for decades. However it is unclear whether these are actual usable resources. Given what we know about this field and the typical recovery rates of oil from fractured reservoirs, actual reserves may be around 200m barrels – reasonably large but not especially so (the largest oil fields in the Gulf have tens of billions of barrels).

We also don’t yet know what sort of oil has been found. Oil in nearby Clair Field is particularly viscous and heavy, which meant it was left in the ground for almost 20 years until better technology and higher prices made extracting it worthwhile. If the Lancaster/Halifax oil has similar characteristics the operator will face additional challenges.

A long way to go

Even presupposing that the geology, oil type and drilling can lead to a successful development, it seems likely that evacuation would have to take place by hooking up the discovery with existing pipeline infrastructure or a Floating Production Storage and Offloading (FPSO) facility.

Oil from platforms is sent to a floating facility for storage until a tanker arrives. Image: Anderson Nova/Flickr/creative commons.

However, with the infrastructure that is now in place and with the experience major operators have gained in developing their oilfields west of Shetland with few incidents, the development of another large field nearby should not prove to be a major hurdle.

This discovery raises various social and political questions, of course. After Brexit, is this the UK’s oil or Scotland’s, or even Shetland’s? Do people want the jobs, income and secure energy supply that comes from a thriving offshore industry, or would they instead highlight the global carbon budget and choose to leave that oil under the sea?

Who knows? What we can say, as petroleum geoscientists, is that we are excited but cautious. After all, it took more than 28 years from Clair’s initial discovery for its reserves to be confirmed.

City Metric



15 Comments on "Is Britain’s ‘largest oil discovery in decades’ really all that?"

  1. Plantagenet on Mon, 10th Apr 2017 11:01 am 

    Last chance for Scotland the Brave to actually be brave and leave the UK.

    Cheers!

  2. Cloggie on Mon, 10th Apr 2017 11:17 am 

    Last chance for Scotland the Brave to actually be brave and leave the UK.

    First see if Brexit happens in the first place.

    http://www.express.co.uk/news/uk/785368/Remainer-Nick-Clegg-EU-exit-U-turn-still-possible-on-Brexit-Day-article-50-theresa-may

    https://mishtalk.com/2017/04/05/brexit-optimism-misplaced-time-for-hardball/

    I Hope Brexit succeeds and Scotland is welcome to remain in Europe and then there is of course Gibraltar that needs to return to continental Europe, if necessary the hard way. Not being a member of Europe has a price.

  3. rockman on Mon, 10th Apr 2017 2:59 pm 

    “Given what we know about this field and the typical recovery rates of oil from fractured reservoirs, actual reserves may be around 200m barrels…”. There is no such data as “typical recovery rates”. Recovery from such reservoirs can range from commercial to insignificant. A high test rate prices nothing: a discovery with such a rate may prove noncommercial. A not uncommon character of fractured reservoirs. Besides not knowing the fracture density across the entire reservoir (how much oil is in place) the nature of the reservoir drive is not known.

    The world class Cantarell Field, offshore Mexico, is a perfect example. Production began in 1979 but stagnated as a result of falling reservoir pressure. In 1997, Pemex developed a plan to reverse the field’s decline by injecting nitrogen into the reservoir to maintain pressure, which was successful for a few years. However, production resumed a rapid decline beginning in the middle of the last decade, initially at extremely rapid rates, and more gradually in recent years. But one should appreciate the enormity and expense of that N2 injection program: it is extracted on site from the air. And the plant is huge: it extracts more N2 the all other such facilities on the planet COMBINED. The reason production declined so rapidly is that the N2 gas cap expanded down dip towards some of the wells which causing excess N2 production and thus had to be shut in.

    The fist step in analysing this discovery is a long term (at least 3 to 6 months) CONTINUOUS production test. Since it’s unlikely there is a water leg under the oil the reservoir drive will likely be “solution gas”: NG (and perhaps others such as helium) are dissolved in the oil. Ax reservoir pressure decreases this gas will come out of solution and help “lift the oil” up the well bore to the surface. There is no standard amount of gas in such systems: it might be a very low or very high saturation. Unfortunately a short production test as the did isn’t sufficient. It must be long enough to establish a “p over z” decline rate: how much the production rate declines per unit of reservoir pressure decline. In conventional reservoirs this can provide a good estimater of URR. But not in fractured reservoirs because the connectivity (anr density) of the fracture pattern is unknown.

    The Austin Chalk carbonate shale is a good example. It tended to be heavily fractured at the top of structural closures and completely unfractured around the flanks.

    It may take years and $billions to fully develop this field if truly is capable of producing hundreds of million or even billions of bbls of oil. Or it may never become a commercial producer.

  4. Yadayada on Tue, 11th Apr 2017 6:21 am 

    Cloggie, if there is a hard brexit and Scotland were to remain in the eu, their entire economy would crash quicker than the oil price last year. It’s not going to happen. If England’s out, they’re out.

  5. rockman on Tue, 11th Apr 2017 8:55 am 

    Y & C – You both may have valid positions: it may be a very big mistake for Scotland to do it AND it may actually happen.

  6. joe on Tue, 11th Apr 2017 9:37 am 

    Brexit? Thats old news already. The EU just stopped to joining of the British and EU biggest bourses. Missed that in your daily significant news? Thought so. Divorce will be bitter and bitchy, but in the end both sides will see sense.
    Or somone will get shot…..

    Who knows.
    Cloggie, there is Europe, and EU, a Euro. But there are no europeans.

  7. Simon on Wed, 12th Apr 2017 1:03 am 

    The Scots voted to stay in the UK, if you were the head of state in the UK, knowing they were wek once, would you either, give them another vote, or … just deny them a vote, and gradually crush them ?

    They will never be allowed to leave as they could be a lovely low tax haven one train ride from London, English speaking, much like Ireland, and that is not acceptable.

    They, unfortunately, will talk big, do nothing and be crushed.

  8. Cloggie on Wed, 12th Apr 2017 1:48 am 

    I agree that after the Scots said “no” in the last referendum, they should have shut up for a generation.

    But Brexit has changed everything. The Scots wanted in majority to stay in the EU. This is a completely new situation, which would bring the previous 45-55 much closer to 50-50.

    They, unfortunately, will talk big, do nothing and be crushed.

    https://wingsoverscotland.com/wp-content/uploads/2013/04/braveheart2.jpg

    Simon wants his own little Kurd problem.

    But what a mess this Brexit could very well turn into.

  9. Simon on Wed, 12th Apr 2017 5:23 am 

    Not My problem Cloggie 🙂

    I am 1500km away and have enough problems of my own (fillon, Poutou etc)

  10. Cloggie on Wed, 12th Apr 2017 5:37 am 

    @Simon, aha, grey hair and hibernating at the Cote d’Azur, eh. Well, good for you. If you have the money, why not. And now hope that Brexit won’t spoil your continental European idyll.

  11. Simon on Wed, 12th Apr 2017 8:52 am 

    Cloggie. No Hair, Not Cote D’azur. Still working (Energy Trading stuff)

    remember, that which does not kill us, only serves to mke us stronger

  12. Cloggie on Wed, 12th Apr 2017 9:47 am 

    Well at least you have read Nietzsche, so something Continental after all.lol

  13. Simon on Wed, 12th Apr 2017 10:21 am 

    Nietzche is a bit dark, but seriously mis-quoted, now Kant is a different matter, complex stuff but really clever.

    However in both cases I am reminded of Nestor

    ‘you never press on to reach a useful conclusion’

    although I paraphrase

  14. Marty on Wed, 12th Apr 2017 2:11 pm 

    Re: The Cantarell field, isn’t “regular” air about 80 % nitrogen ? Why inject pure nitrogen and not simply air ? What’s the chemistry going on?

    -Marty

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