North Sea looks to green recovery postpandemic

Oil and Energy TrendsVolume 46, Issue 3 p. 3-6 FOCUSFree Access North Sea looks to green recovery postpandemic First published: 10 March 2021 https://doi.org/10.1111/oet.12841AboutSectionsPDF ToolsRequest permissionExport citationAdd favoritesTrack citation ShareShare Give accessShare full text full-text accessPlease review our Terms Conditions of Use check box below share version article.I have read accept the Wiley Online Library UseShareable LinkUse link a this article with your friends colleagues. Learn more.Copy URL Share linkShare onEmailFacebookTwitterLinked InRedditWechat UK oil gas output fell in 2020 due low prices restrictions associated pandemic, another fall is likely year extensive deferred maintenance. Workforce levels are down sharply, in-fill drilling has been postponed, new project developments delayed. Norway fared better strong government support, along start-up giant Johan Sverdrup field—which exceeded expectations by 60 000 bpd, reaching 500 bpd. Recent price rises bolstered sentiment, investors, entrants projects both United Kingdom expected lead higher 2022, helped well-developed infrastructure recent successful cost reductions—although power solutions now look be essential. The Covid-19 pandemic had significant impact on production Sea, although still managed increase (see below). UKCS 6% over first 9 months 1.05 mn saw decommissioning brought forward at some late-life fields. By November, crude was 15% Figure 1), averaged just 931 bpd September-November period, according statistics. Preliminary figures available February suggested 8% overall about 102 while workforce numbers were 20%, trade body Gas UK, severely impacted spending cuts. FIGURE 1Open figure viewerPowerPoint (Norway UNITED KINGDOM) Source: NPD, OGUK, Platts This year, there disruption from maintenance, including 40s pipeline, which carries third output. Consequently, International Agency expects will drop 1mn (a optimistic) 2020. could also hit—Westwood forecasts slight total 1.64 boe/d 2021.1 UKCS' largest independent, Chrysaor, currently merging Premier Oil, said it its full-year heavy maintenance half recently drilling. In contrast, Shell, bring stream, little change 2021. Production then rise again 2022 above 1.7 after fields online year. Beyond that, S&P 24% around 830 2025. Spending field $4 bn $3.8 partly work, notably Oil's Tolmount Zennor's Finlaggan projects. Shell's revamped Shearwater hub come stream Shell considering two West Shetland projects—the 800mn bl Cambo prospect, next stage Clair development, South, where BP operator. Independent Siccar Point hopes approve 2021, secured an extension reserves-based lending facility December, but needs BP's approval move forward. There boost CNOOC-operated Buzzard field. 1 NORWAY RISING affected restrictions, increased 17% 2 2020, Norwegian Petroleum Directorate (NPD), as ramped up. Of this, accounted for 1.69 As Kingdom, take hit reduced removal OPEC-plus quotas should see anyway. beyond first-phase middle thanks water injection. Total 4.18 removed, slightly more onstream or reach levels. Several smaller approved result tax breaks last provided $11 relief operators encourage them end 2022. It estimated lowered breakeven these $10/bbl average. Longer term, 19% 2024 second development phase Q4 Castberg Barents enter 2023, NPD mid-January. liquids 2.38 2024, averaging 2.07 5% 2020-2024 1.98 boe/d. Given lack major discoveries years, increasingly focusing future role enhancements mature additional small (as authorities doing time): “History past 20 years shown that discoveries, volumes up 25 million m3 equivalent (160 boe), together contribute value creation than larger made during same period,” said. investment industry held steady despite year's crash, rising 3% NOK155 ($18 bn). However, producing NOK109 bn, ongoing falling 3%, NOK35 breaks—although may this. Looking ahead, activity being maintained, Norway's zero carbon commitments. latest annual licensing round mid-January, awarded licenses Lundin Equinor, awards Eni-owned Var Energi, DNO, Neptune Energy, Wintershall Dea, PGNiG. launched long-awaited frontier offering rights 136 blocks, mostly Sea. M&A ON THE UP; PLENTY OFFER “energy transition” mean plenty upstream assets market, tight finances companies. spurred activity, biggest deal merger private equity-backed Chrysaor form Harbour Energy. Over Norway, Italy's Edison agreed sell business local company, Sval $300 mn. Further stability returns markets. Deals include sale ExxonMobil's business, speculation growing company providing information parties interested assets. addition, reopened stakes Sea's Andrew area oilfield previous $625 apart October taken Chrysaor. reportedly called send bids no deadline. addition Exxon, Japan's Marubeni reported selling assets, non-operated stake Montrose-Arbroath area, situated Central contains Montrose, Arbroath, Arkwight, Brechin, Wood, Godwin, Cayley, Shaw fields, produced 24 41% project, joint venture Repsol Sinopec Resources operator 59%. Other Japanese companies, Idemitsu Kosan Itochu exited leaving only JX Nippon E&P Mitsui & Co. holds shares 3500 Columba unclear whether sale. Others seeking divestments CNOOC Suncor. On buyer side, equity interest through such Habour well companies Pandion Zennor Petroleum, aim invest promote technical upgrades curb emissions. NORTH SEA TURNS GREEN light UK's commitment net-zero emissions 2050, negotiating “North transition deal” industry. charting path decarbonization, intends preserve jobs create opportunities. reviewing offshore regime ensure they compatible zero-carbon goal, possibly increasing support CCS hydrogen production, added pressure run COP26 Glasgow. Denmark already announced plans stop exploration out extraction altogether neither nor route stage. Domestic sectors argue continue needed, indigenous supplies CO2 footprint less imported LNG. regulator, Authority (OGA) estimates pipeline 22 kg/boe, compared 18 kg/boe 59 “UK until 2050 consistent [UK] Committee Climate Change scenarios,” Nick Richardson, OGA head ventures, told Prospex conference December. “Security supply remains important, remain economic sector economy significant.” result, adopt remit requiring maximize before), achieving goal 2050. Trade body, pledged halve operational 2030, “up honest discussion.” BP, all announcements capture industrial sites store under One issue, electrification facilities, prove critical success otherwise influence investments, UK—including Rosebank, further south. electrified large portions earlier Focus) catch get down. Power generation using diesel gas, accounts 10% 70% A dubbed ORION (Opportunity Renewables Integration Offshore Networks), aims backed wind Shetlands, Hub. SSE, Total, EnQuest, Islands Council (SIC), OGTC involved project. Another five schemes planned waters. initially rely onshore wind—including 450 MW Viking farm coming 600 mainland interconnector acting backup. Thereafter, various Developments west Shetland, Glen Lyon phases field, would require combined 194 electrify, demand among other facilities. term hoped 5 GW can harnessed Shetlands (about 20% current demand). provide surplus produce scale, helping backup fuel when low—and later, exports Europe, existing infrastructure. expanding 2025 powered hydroelectricity shore. country leads decarbonization took Equinor November (some European peers) announce operations consumption products Despite anticipated output, expecting reductions 40% 4 ALTERNATIVE FUTURE relatively low-carbon profile; established open supportive regulatory environment appealing many investors. inevitably decline years. hand getting going. Orsted developing Denmark's ever construction 210 krone ($34 bn) man-made island,” alongside hundreds turbines help achieve climate neutrality numerous modest projects, costs keep falling. Where cheap energy, follow, lease life alternative energy region. transform region's depleted hydrocarbon into storage industry, extend socially acceptable capturing emitted fossil fuels produced. All proposed partnerships state backing, so far Equinor-led Northern Lights approved, generous contribution government. REFERENCE Westwood Global Group. Exploration Outlook https://www.westwoodenergy.com/news/westwood-insight/uk-and-norway-exploration-and-production-outlook-for-2021. Accessed 23, Google Scholar Volume46, Issue3March 2021Pages FiguresReferencesRelatedInformation