In the news this week…

OGA issues new tenders for new seismic surveys and other subsurface work

The OGA has released the Invitation To Tender (ITT) for the 2016-2017 UK Government funded seismic acquisition and processing programme. The successful recipient(s) of the contract will be required to survey areas over South West Britain including the Celtic Sea, Western English Channel, Irish Sea and also the East Shetland Platform. These areas were selected after consultation with industry.

Click here to read the full article

OGA Data Release

The Oil & Gas Authority has released almost 40,000 line kilometres of new and legacy seismic data acquired during last year’s successful £20 million Government-funded seismic survey of the Rockall Basin and Mid-North Sea High (MSNH) area.

The data package includes processed seismic data from the 2015 surveys as well as legacy data, Gravity and Magnetic maps and Well data. It has been published via the Common Data Access UKOilandGasData portal www.ukoilandgasdata.com. Data packages under 20GB in size may be downloaded for free, while larger data packages will be available on media only, for which a charge will be made to cover media, handling, and delivery costs.

The data release was welcomed by Deirdre Michie, Oil & Gas UK’s chief executive. She said: “We welcome the news that the Oil and Gas Authority is now releasing into the public domain the substantial volume of seismic data from the UK government-funded surveys. This marks a milestone in the collective efforts to re-energise exploration activity on the UK Continental Shelf (UKCS). The OGA is publishing the data via the UKOilandGasData.com portal, the industry’s shared data management service operated by Common Data Access (CDA), a subsidiary of Oil & Gas UK.

“There is a comprehensive array of information available, including both newly acquired and legacy seismic data plus gravity and magnetic maps and well data. It represents a new dimension in both the quantity and quality of subsurface data available in these frontier areas, which should help stimulate further interest in the forthcoming 29^th Licence Round. Record numbers of organisations both in the UKCS and overseas have already registered an interest in downloading the data and it is a testament to the focus and hard work of many individuals that the project has been delivered so effectively.

“The industry recognises the government’s commitment to stimulating exploration in the UKCS, where we believe billions of barrels of oil and gas are yet to be recovered. The government is making an additional £20 million available to fund new seismic data acquisition this year for release in 2017 and this is also very much to be welcomed. The industry is working with the OGA to help identify the priority areas where the new data should be acquired.  The results from these surveys will again be made available to the wider industry and academia.”

WesternGeco, a Schlumberger company, was awarded the seismic contract in July 2015 and all three seismic vessels – Vespucci, Tasman and Regent – were in the field later that month. The latest seismic acquisition and processing technologies were used to enhance subsurface imaging and help improve understanding of the geology and potential prospectivity.

The OGA is currently preparing for the 29th Licensing Round which, subject to the necessary regulatory approvals, will be announced later in 2016 focusing on under explored Frontier areas using the data from the seismic campaign. In January 2016, the Prime Minister announced a further £20 million seismic survey campaign. OGA has begun consulting with industry on areas to be covered with initial interest being shown in the East Irish Sea Basin, South Celtic Sea, South West Approaches Basin and Orcadian Basin. The focus on under-explored frontier areas allows modern exploration techniques and ideas to be applied to regions that have received minimal attention for decades.

In the news this week…

Eni slashes breakeven to $27. Sets $7B divestment target

Italian oil company Eni has set a $7 billion divestment target for the period between 2016 and 2019, slashed the breakeven oil price and said the industry needs to understand that the low oil prices are actually not low, but normal.

Click here to read the full article

OGA Launches Exploration Licence Competition

The Oil and Gas Authority has launched a competition linked to future exploration licensing rounds in order to stimulate further offshore oil and gas exploration activity in the United Kingdom Continental Shelf (UKCS).

The £500,000 competition was announced by Prime Minister David Cameron on 28 January 2016 as part of a package of government support measures for the oil and gas industry during his visit to Aberdeen. It has been designed to encourage geoscientists and engineers to develop innovative interpretations and products potentially using the data acquired during last year’s successful £20 million Government-funded seismic surveys of the Rockall Basin and Mid North Sea High (MNSH) areas.

Successful applicants may be awarded up to £30,000 ‘seed funding’ to carry out initial analysis, then two winning candidates may be awarded around £100,000 to develop their work into a final product for use by the OGA.

It is hoped the competition will not only significantly increase the understanding of these frontier areas in respect of the 29^th Seaward Licensing Round later in the year, but also retain talent in the oil and gas community which has been affected by the oil and gas industry downturn.

The data package available to applicants consists of around 40,000 km of new and reprocessed legacy seismic data (including a substantial set of Broadband 2D seismic data), supplemented by gravity, magnetic and well data.

In addition, in order to stimulate exploration interest in advance of the 29^th Licensing Round, OGA will make all of this data openly available at the end of March 2016 – the first time such large quantities of data have been made freely available to all. The data will be published via the Common Data Access (CDA) UKOilandGasData portal.

Gunther Newcombe, OGA Exploration and Production Director, said: “We hope this competition will lead to a greater understanding of some of the UK’s frontier areas and capture the imagination of some of the brightest minds in the highly talented geoscience community.

“For the first time, substantial quantities of new and reprocessed seismic data will be freely and openly available to all. This, and the forthcoming implementation of a more flexible new licensing regime, will play a crucial role in revitalising exploration of the basin.”

Energy Minister Andrea Leadsom said: “This Government is clear that the broad shoulders of the UK are fully behind our vital oil and gas industry, the hardworking people it employs and the families it supports.

“New exploration is its lifeblood and we funded these seismic studies to support the industry in exploring and unlocking that potential. This competition encourages companies to come up with new, innovative ways to make the most of this data and I look forward to seeing what they propose.”

For more information on the competition and to register an expression of interest, please visit https://www.gov.uk/contracts-finder

Oil & Gas UK’s Activity Survey 2016 released last week

Oil & Gas UK’s Activity Survey 2016, published on 23 February 2016, reveals that while the industry’s drive to improve efficiency, reduce operating costs and increase production has had marked success, exploration remains at an all-time low and investment in new projects is set to fall to less than £1 billion this year. The report highlights the urgent need for fiscal reform to attract investment back into the basin and minimise loss of capacity during the downturn.

Around 500 delegates turned out to hear at first-hand the findings from the report at five briefings held across the last week in February in Aberdeen, London, Inverness, Newcastle and Norwich.

The full report is available online

House of Commons Report: Future of CCS in the UK

The Government’s decision to pull funding for carbon capture and storage (CCS) at the last minute will delay the development of the technology in the UK and could make it challenging for the UK to meet its climate change commitments agreed at the Paris COP21 summit, an Energy and Climate Change Committee report has warned.

Click here to read the House of Commons report published yesterday

Aberdeen News

Following David Cameron’s visit to Aberdeen there have been a number of announcements from both the UK and Scottish Governments for the Oil and Gas industry and for the Aberdeen region in the past week. It is probably worth getting a summary of this into the Magazine if possible.  Let me know what you think – happy to remove some items that relate to road and rail.

City Region Deal
Up to £250m investment, half from the UK Government and half from the Scottish Government, to be made over the next 5-10 years.

• a new oil and gas technology centre, supporting the industry to exploit remaining North Sea reserves
• funding towards the expansion of Aberdeen harbour to enable the city to compete for decommissioning work
• support to help the region diversify into the biopharmaceutical and agri-food industries
• improvements to digital connectivity

Additional UK Government commitments

• Ministerial group chaired by Rudd which will publish work plan in the spring but skills and infrastructure have been referenced as potential focus
  £20m of new funding for a second round of new seismic surveys
• The appointment of an oil and gas ambassador focussed on exports and investment
• £1.5m for Innovate UK’s ‘Energy Game Changer’ which will help micro businesses and SMEs from outside the energy sector develop disruptive technologies for use by the energy industry
• £700k for Heriot Watt University’s Lyell Centre for 3D visualisation facilities
• £1m investment in the Oil and Gas Centre for doctoral training at Heriot Watt University
• The OGA will publish a decommissioning strategy by early summer
• The MER UK strategy has been laid before parliament (28 Jan)

Additional Scottish Government investment

• £12 million Transition Training Fund to provide retraining to those losing their jobs in the oil and gas industry so that they can gain employment in the wider energy industry or manufacturing
• £12.5 million for Scottish Enterprise comprising £10 million for them to help firms kick-start innovation projects and £2.5 million for senior industry experts to conduct business resilience reviews.
• An initial £200 million additional funding to help improve journey times and increase capacity on key rail links between Aberdeen and the Central Belt
• £24 million of funding for the trunk roads programme to support improvements to the key A90/A937 south junction at Laurencekirk
• £10 million for extension of digital infrastructure in the Aberdeen and Aberdeenshire area above and beyond the commitment through the City Deal
• £20 million in infrastructure funding to unlock housing sites that are of strategic importance to the local authorities

Private sector investment

• £20m for the redevelopment of Aberdeen International Airport

Oil & Gas UK Press Release: Oil & Gas UK welcomes Prime Minister’s support for industry and City Deal

Deirdre Michie, chief executive of Oil & Gas UK, said: “We very much welcome Prime Minister David Cameron’s visit to Aberdeen and his recognition of the seriousness of our situation.  His announcement today of a £250 million fund for the Aberdeen Region City Deal, coupled with the matched funding from the Scottish Government, is a much needed positive step forward for north east Scotland and will benefit our sector more widely.

“While the oil and gas sector is under severe pressure globally, due to the current oil glut and price collapse, it is being felt particularly forcefully on the UK Continental Shelf (UKCS), which is a mature basin with its own particular difficulties and cost challenges.

“Companies are doing all they can to bring down costs and be more efficient, but many are still having to make difficult decisions. Support from both the UK and Scottish Governments, the Oil and Gas Authority and local authorities is vital so it is extremely timely that the Deal will see co-operation between these parties.

“The UKCS needs to restore its competitiveness and attractiveness as a place to do business. Without that, industry won’t be able to maximise recovery of resources – the billions of barrels of oil and gas that still remain in the North Sea.

“Aberdeen and the north-east of Scotland have to compete with international energy hubs such as Houston and Dubai. Investing in infrastructure and innovation here, particularly through the new energy innovation centre, is a hugely positive move which will further cement Aberdeen’s position as Europe’s oil capital, at the heart of the UK ‘offer’ to the global oil and gas supply chain.

Deirdre Michie also welcomed the new ministerial group on oil and gas, chaired by Energy and Climate Change Secretary, Amber Rudd: “Senior level, co-ordinated engagement from Government to support the industry and those who work in it is very encouraging. The group’s focus on exports, skills and investment is highly relevant in today’s climate and Oil & Gas UK stands ready to engage with it on its workforce plan in the Spring.”

Deirdre Michie concluded: “Today’s developments are good news for our industry but our efforts must go on. Industry needs to continue to work with the Oil and Gas Authority to ensure we have a world class regulatory regime, and with Treasury, through their ‘Driving Investment Strategy’, to ensure we have the most appropriate fiscal regime possible.

“Despite our difficulties, this is still very much an industry with future, capable of playing a critical role in meeting the UK’s energy needs, bolstering the UK economy and supporting hundreds of thousands of UK jobs.”

DEVEX 2016 to be free for first time in 13-year history

OGA Press Release: New onshore oil and gas licences offered

The Oil & Gas Authority (OGA) – the UK’s oil and gas regulator – announced on Thursday (17 December 2015) that 159 onshore blocks under the 14th Onshore Oil and Gas Licensing Round are being formally offered to successful applicants. These blocks will be incorporated into 93 onshore licences.

Click here to read the full article

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