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Maximizing Economic Recovery in the Outer Moray Firth

Maximizing Economic Recovery of remaining oil and gas reserves in the Outer Moray Firth through a Special Interest Group.
This article appeared in Vol. 16, No. 2 - 2019

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Maximizing Economic Recovery in the Outer Moray Firth

Location of Outer Moray Firth. The Outer Moray Firth (OMF) is a prolific hydrocarbon basin on the UK Continental Shelf (UKCS) with declining production and a number of fields that have now been abandoned. 

The basin has, however, previously seen declining production, only to be followed by rejuvenation as significant new discoveries have come onstream. 

Some of these discoveries had already been penetrated by early, poorly placed, exploration wells that misled geoscientists into greatly underestimating the size of the pool at the time.

Special Interest Group for the Outer Moray Firth

The Claymore field in the Outer Moray Firth was discovered by Occidental in 1974 and came on production in November 1977. It is currently operated by Repsol Sinopec Resources, who are part of the Outer Moray Firth Special Interest Group. Source: Repsol Sinopec Resources. In 2017 a Special Interest Group (SIG) was set up to maximize the economic recovery of hydrocarbons within the basin. This is in line with UK’s Oil and Gas Authority (OGA) objectives for the UKCS, and the OGA assisted in helping get the SIG up and running, but once active then stood back from the process. 

It had been recognized by the various companies active in the basin that over the coming years much of the infrastructure within the basin would be decommissioned, potentially resulting in resources remaining in the  ground. It was this dilemma that drove the case for the formation of a  Special Interest Group and the development of an Area Plan to try and maximize recovery.

As mentioned previously, the production history of the basin is interesting; it has three production humps, rather than a production plateau followed by decline (see figure bottom of page 25) .This can be attributed to the complexity of play types within the basin, and the underestimation of the size of early discoveries due to the poor positioning of the initial exploration well (e.g. Scott, Buzzard and Tweedsmuir fields). One of the questions raised in forming the SIG was: does this complexity mean that there is the potential for a fourth production hump?

  • Outer Moray Firth production history.

In setting up the SIG, a decision was made very early in the process that, rather than have one or two E&P companies leading the Group, it was to be facilitated by a consultancy (1st Subsurface) with the relevant experience. This stopped any one company appearing to dominate and made collaboration between the companies easier. Importantly, it also provided manpower to a slimmed down E&P workforce, with a dedicated facilitator having the advantage of providing focus to help coordinate and move work forward.

Unlike some hydrocarbon producing basins, the OMF is not dominated by a single company with an overall understanding of basin production, resource and infrastructure. This lack of a dominant player helped further make the case for collaboration and the formation of the SIG. 

Setting Up an Area Plan

Top: Fluid types for exploration targets and discoveries by count. Bottom: Contingent and prospective resources for SIG high-graded fluid types. After significant discussion within the SIG, it was decided that a phased approach should be taken to executing an Area Plan, with the first phase primarily focused on building a shared understanding of the remaining resource potential of the basin. 

The SIG had a diverse membership of E&P companies for Phase I of the Area Plan, ranging from the major operators of mature assets to start-up niche players, both with and without acreage in the basin. The companies involved in this phase were CNOOC, Equinor, Kimmeridge Energy, MOL Group, Parkmead Group, Ping Petroleum, Pharis Energy, Repsol Sinopec Resources and Spirit Energy, with Suncor subsequently backing into the first phase of the study. Membership costs were structured to help maximize collaboration and encourage diversity of company size. 

It was decided that the SIG would build its own database, which was to cover producing and abandoned fields, discoveries, and prospects and leads. This database (now called Trove) would provide a basis on which to estimate the contingent and prospective resource within the basin, as well as a database of potential opportunities within the basin and a toolkit to both help provide parameters for volumetric estimations and assist in peer-reviewing opportunities.

Trove Database

With competition law in mind, it was decided that the database would initially be based on public domain data. It was important for the membership that Trove was a structured database, with an audit trail showing a collation of all interpretations from the various evaluating companies and the nature of that documentation (e.g. relinquishment report versus farm-out flyer). The audit trail was the main driver in the decision to build the database, as it allowed individuals to make judgement calls on the quality of the resource and risking numbers.

Public domain data is particularly good in the UK because of the OGA relinquishment report requirements. In addition, the willingness of companies to publish field data and the richness of smaller to moderate size E&P company information on their websites give a solid basis on which to construct a database. To enhance the database, SIG Members made available non-confidential data that was not in the public domain.

As the SIG moves into Phase II of the Area Plan, the database is being used by members to have conversations around resource numbers, comparing them with their internal evaluations, and then agreeing to update the database as necessary. Again, this is non-confidential information, but currently not in the public domain. Where confidential information needs to be used, the SIG have developed a toolkit which they believe complies with competition law, and are ready to bring that before the Competition and Mergers Authority when necessary.

Outer Moray Firth Resource Potential

At the end of Phase I, a total of 375 prospects and leads were identified within a 30 km tie-back distance of the OMF infrastructure, with 77 considered downgraded leads. These had a prospective resource of 5,856 MMboe, with a risked prospective resource of almost 1 Bboe. A total of 95 discoveries were identified, with a contingent resource of 1,171 MMboe.

In understanding how best to develop the remaining potential within the basin, documenting the fluid types is essential for both the contingent and prospective resource. The fields and discoveries within the basin are dominated by light and medium oil, with a significant portion of heavy oil, lesser amounts of sour crude, and gas and gas condensate. Heavy oil was split into those crudes with a specific gravity of less than 20° API, and those between 20° and 25° API. The inclusion of the latter grouping reflects some of the development challenges they present on the UKCS. HPHT oil and gas condensate made up a very small portion of discovered resource.

To the Group’s knowledge there had been no previous attempt to systematically quantify the likely fluid types in the exploration targets across the basin. Predictions were based on nearby fluids, depth, pressure cells, and migration routes. The result was a distribution similar to the discoveries. Some differences may be expected in that sour fluids are less likely to have been developed and shallow targets that are likely to contain biodegraded heavy oil remain disproportionally undrilled. 

Analysis of the data identified three categories of contingent resource on which future SIG work should focus: sour oil, heavy oil and small pools. HPHT and gas did not show as having much significant remaining potential. There is also exploration potential in these three categories, though until the challenges of tying in small pools has been solved, they are unlikely to become an exploration target.

Unlocking the Remaining Hydrocarbon Potential of the Outer Moray Firth

Scopes of Work – Theme matrix for Phase II of the Area Plan. At the end of Phase I of the Area Plan, the three high-graded contingent resource categories based on potential resource size and to a lesser extent on the membership focus were sour crude, heavy oil, and small pools. For Phase II of the Area Plan, a focused work program was pulled together to better define each of the three high-graded contingent resource categories, identify barriers and drive actions to move towards development. The SIG has initiated the first of these three work programs.

In addition, four enabling workstreams have been identified: exploitation, investability, technology, and infrastructure criticality. Again, these are being executed in a rolling manner, with the technology scope being worked on with the UK Oil and Gas Technology Centre (OGTC). The investability workstream addresses the capital cost elements of wells, trees, and tie-back pipelines. This will seek to produce a Which-type reliability guide and look at cost savings through standardization.

The OGTC has become progressively involved with the OMF Special Interest Group. By defining the remaining potential of the basin, alongside a rich database around which a technical conversation can take place, the impact of the technologies required to unlock that potential can be quantified and R&D spend justified. This then feeds back into a willingness and alignment of the SIG Members to support OGTC initiatives such as ‘Tie-back of the Future’, with studies of particular focus on the issues facing the OMF. Joint SIG Member funding has the potential to be matched by the OGTC, with further funding from industry bodies such as Scottish Enterprise.

The Outer Moray Firth Special Interest Group is in the early stages of the second phase of the Area Plan, and is looking to recruit new members, irrespective of their size. Further details on the SIG and various papers presented can be found on the OMF SIG website at www.omfmer.uk.

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