The exploration activity is thus strongly increasing, and the forecast for the number of exploration wells in 2019 is on a par with 2013-2014. In addition, 200 licenses will make drilling decisions over the next few years, and new rounds are in the pipeline. Therefore, there is definitely potential for many and new discoveries to be made.
The exploration activity in the UK seems to have reached the bottom in 2018 with a record-low of 13 exploration wells (8 exploration, 5 appraisals). So far in 2019 (August), the number is 16, and it may end at 30 for the year, the highest level in the UK since 2013-2014.
Corresponding figures for Norway are 30 so far, and 50 are forecasted for the year.
The historical exploration activity in the UK peaked before the 2008 financial crisis, with 76 exploration wells (41 exploration), and it has been steadily declining thereafter.
In Norway, there was a new peak in the number of exploration wells in 2013 (the previous one was in 2009), before the fall in oil prices and activity ended in 2016.
Awarded licenses that have outstanding drilling decisions over the next few years are close to 200 in the UK (Norway has around 160 in comparison), including the latest allocations in Round 31 earlier in 2019.
Round 32 is already underway with an application deadline in November this year. In addition, exploration wells are drilled in the hundreds of older, perpetual licenses, often linked to existing fields and discoveries.
The exploration potential for undetected resources in the UK is estimated by the OGA to be 8 to 24 Bboe (the Norwegian Petroleum Directorate has specified 6 to 32 Bboe. for Norway, not including the Barents Sea northeast). In addition, the UK has more than 300 discoveries with more than 3 billion barrels of resources that are subject to exploration activity.
The most important discoveries in recent years include BP’s Achmelvich (2017) near Clair west of Shetland and Total’s Glendronach (2018). In addition, we must include Hurricane’s basement play recently put into production (Lancaster) and the North Sea with CNOOC’s Glengorm (2019). In the future, exploration wells are planned in most areas of the UKCS.
The UK’s “OGA” (Oil and Gas Authority), established in 2016, following the Wood report of 2014 and their focus on “MORE” (Maximise Economic Recovery) has created a new drive in the UK with demands for progress and allocation of still new exploration licenses.
The diversity of companies active in the UK is also important. A total of 110 companies are currently active offshore UK (Norway has 38 companies). Among the largest companies, measured in terms of active exploration licenses are Equinor, Chrysaor (including the acquisition of ConocoPhillips), Spirit, Total, BP and Shell.
The large non-US companies originating in the North Sea are therefore still among the most active. At the other end of the scale are a number of small companies, a couple of them (Cluff and Soliton) have recently succeeded in including Shell and Equinor in their licenses in advance of drilling decisions.
We can, therefore, conclude that the UK has exciting prospects for exploration, a considerable potential for several interesting discoveries, and a great diversity of companies, licenses and areas for exploration.