New BP Discoveries Spark Industry Excitement


By MarEx 2018-01-31 16:53:23

BP has announced two new exploration discoveries in the North Sea with the industry hailing them as a sign that the region still has significant potential.

The discoveries are Capercaillie, in Block 29/4e in the Central North Sea, and Achmelvich, in Block 206/9b west of Shetland. BP is 100 percent owner of Capercaillie and the Achmelvich well partnership comprises BP (operator, 52.6 percent), Shell (28 percent) and Chevron (19.4 percent).

The Capercaillie well was drilled to a total depth of 3,750 meters and encountered light oil and gas-condensate. Options are expected to be considered for a possible tie-back development to existing infrastructure. The Achmelvich well was drilled to a total depth of 2,395 meters and encountered oil. Evaluation and interpretation of the well results is ongoing.

Mark Thomas, BP North Sea Regional President, said: “These are exciting times for BP in the North Sea as we lay the foundations of a refreshed and revitalized business that we expect to double production to 200,000 barrels a day by 2020 and keep producing beyond 2050. We are hopeful that Capercaillie and Achmelvich may lead to further additions to our North Sea business, sitting alongside major developments like Quad 204, which came onstream in 2017, Clair Ridge, due to come into production this year, and the non-operated Culzean field, expected to start-up in 2019.”

Industry body Oil & Gas UK says the discoveries mark a more positive start to the year for the U.K.’s offshore industry. “Our competitive fiscal terms, and the strides we have made to bring our finding costs in line with our peers, make the U.K. continental shelf a very attractive basin for doing business,” says Chief Executive Deidre Michie.

“While industry continues to build on its efficiency program, Oil & Gas UK will continue to work closely with stakeholders to ensure no stone is left unturned in our efforts to maximize economic recovery from the basin.” 

Fiona Legate, Senior Analyst, North Sea Upstream at Wood Mackenzie, is also positive. She says: “BP's discoveries are a welcome boost to the mature U.K. continental shelf. The majors still have appetite for mature plays and as we can see, there is life in the old dog yet.”

However, she adds: “In general, there is very little transparency on new discoveries in the U.K. continental shelf. The only official number released for discovered resource in 2017 is 172 mmboe - from the OGA. Companies have up to five years to reveal well results after making a discovery. We view this as a blocker to investment. Switching to a Norwegian-style model of announcing reserves at the time of discovery could help the supply chain to evaluate new business opportunities. It would also help other explorers to make better decisions.”