After playing a pivotal role in the European economy for decades,
offshore hydrocarbon production has declined steeply in recent years and
is struggling to arrest the dive. Since 2000, offshore oil and gas
output has fallen 41% to 5.6 MMboe/d in 2013 from 9.7 MMboe/d (Fig. 1).
The decline is largely the result of outdated regulation, aging
infrastructure, and depleted fields. Well completions during 2000-13
have dropped at about half the rate of production, suggesting more
greenfield projects are desperately needed as average well flow rates
plummet.
For this to happen, however, exploration activity must increase. This is particularly the case in the UK, which has seen the most dramatic production decline since the peak in the late 1990s.
Offshore oil production in the UK has plummeted since 2000 with 2012 output equaling 35% of 2000 levels. This cannot be put down to the UK Continental Shelf's (UKCS) extreme maturity alone (Fig. 2).
Outdated regulation also has played a part. When the UK's offshore
production regulations were drawn up in the 1970s, developments were
confined to the largest UKCS fields. Such fields allowed for high taxes
and single-minded infrastructure due to the geographical spacing of
projects.
Of the 300 fields now producing offshore UK, many are relatively small and unsuitable for tax regimes devised for large fields. Ideally, such small fields would be served by infrastructure developed by several operators for multiple projects-currently this is not encouraged by the UK Treasury or the Department of Energy and Climate Change (DECC).
The recent Wood Review highlighted the significance of these problems and suggested field allowances be addressed project by project with collaboration among operators to produce more effective, less costly infrastructure
Discoveries off Sicily have increased reserves in recent years and could lead to offshore output peaking at 0.4 MMboe/d in 2018, necessitating around 80 wells to be drilled in the interim. This will be an increase on recent years due to a reduction in drilling activities following the Gulf of Mexico Macondo well blowout and oil spill .
As with the UK, this scenario would be affirmed by ebb in Russia's gas supplies, which accounted for 42% of total Italian imports in 2013.
Despite being a small entity in the North Sea, compared with Norway and the UK, Denmark is the EU's only net exporter of oil; its first offshore oil discovery was in 1965
Read more: New development expected to arrest European offshore decline - Oil & Gas Journal
For this to happen, however, exploration activity must increase. This is particularly the case in the UK, which has seen the most dramatic production decline since the peak in the late 1990s.
Offshore oil production in the UK has plummeted since 2000 with 2012 output equaling 35% of 2000 levels. This cannot be put down to the UK Continental Shelf's (UKCS) extreme maturity alone (Fig. 2).
Of the 300 fields now producing offshore UK, many are relatively small and unsuitable for tax regimes devised for large fields. Ideally, such small fields would be served by infrastructure developed by several operators for multiple projects-currently this is not encouraged by the UK Treasury or the Department of Energy and Climate Change (DECC).
The recent Wood Review highlighted the significance of these problems and suggested field allowances be addressed project by project with collaboration among operators to produce more effective, less costly infrastructure
Discoveries off Sicily have increased reserves in recent years and could lead to offshore output peaking at 0.4 MMboe/d in 2018, necessitating around 80 wells to be drilled in the interim. This will be an increase on recent years due to a reduction in drilling activities following the Gulf of Mexico Macondo well blowout and oil spill .
As with the UK, this scenario would be affirmed by ebb in Russia's gas supplies, which accounted for 42% of total Italian imports in 2013.
Despite being a small entity in the North Sea, compared with Norway and the UK, Denmark is the EU's only net exporter of oil; its first offshore oil discovery was in 1965
Read more: New development expected to arrest European offshore decline - Oil & Gas Journal
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