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UK Oil and Gas Production Efficiency Rises to 73%

Source: 6/15/2017, Location: Europe

Production efficiency (PE) on the UK Continental Shelf (UKCS) has risen for a fourth consecutive year to 73%, according to a new publication released by the Oil and Gas Authority (OGA), representing an additional production of 12 million barrels of oil equivalent (boe) compared to 2015.

The report, UKCS Production Efficiency in 2016, compares actual production in 2016 to the theoretical maximum economic potential of the fields and associated infrastructure, compared to previous years. Data were collected as part of the OGA's 2016 UKCS Stewardship Survey, which allowed for a more in-depth analysis in key areas, for example in looking at the major causes of lost production.

PE is an important indicator for the industry and the OGA as a core element of production optimisation and asset stewardship performance. PE is also a key focus area for the Maximising Economic Recovery (MER) UK Asset Stewardship Task Force. In its Activity Plan 2017 and 2018, the OGA identified PE as a Key Performance Indicator (KPI) for industry, with a target of 80% PE for the UKCS by the end of 2018.

Recent years have seen the UKCS reverse the declining trend in both PE and overall production. From 2012 to 2016, losses have fallen by 157 million boe while production has risen by 34 million boe.

Other key points from the report include:

- In 2016, 38% of hubs met or exceeded the overall target of 80% for the UKCS, compared to 30% the previous year
- Over four years, increases of up to 57% (absolute) have been seen in operator production efficiency
- Since 2012 there has been cross industry improvement with 88% of operators increasing in efficiency
- Total losses in the UKCS were 210 million boe. Plant losses are the largest category in the Central North Sea (CNS), Northern North Sea (NNS) and West of Shetland (WoS), with the majority of losses caused by full plant outages
- In the Southern North Sea (SNS), wells is the largest loss category. This is due (at least in part) to the later life stage of the region and the resultant degradation of well productivity over time
- Water injection efficiency has increased by 3% in 2016 from 2015, delivering reduced loses and improving production
- In 2016 there was a potential 'prize' of an additional 160,000 boe a day equating to 59 million boe a year from all hubs hitting an average PE of 80% in the UKCS

Gunther Newcombe, OGA Operations Director, said: "Industry's combined persistence and focus on increased production efficiency in the UKCS has delivered an additional 12 million barrels in the past 12 months. This is playing an important role in delivering MER UK.

"There remains more work to be done to meet the OGA and industry's joint PE target of 80%. In 2016, there was the potential to increase UKCS production by 29 million barrels. If these projects were completed, this would have increased UKCS PE by another 3%.

"Operators in the UKCS today are working in a diverse landscape, many operating mature assets, in increasingly interdependent fields with vastly differing scales of production and ranges of efficiency. This report highlights no correlation between total size of production and efficiency with examples of highly efficient large producers, less efficient small producers and vice versa.

"We will continue to support all operators in their efforts to further increase PE through the OGA's tiered reviews and through the MER UK Asset Stewardship Task Force and its Production Efficiency Task Force, focusing on gas compression, shutdown and terminal infrastructure losses."

Matt Nicol, Production Efficiency Task Force (PETF) Chairman said: "The report highlights industry has improved for a fourth consecutive year, and increased PE from 60 to 73%. This is great progress but we still have more to do to achieve the 80% target.

"Plant losses have reduced significantly again, and the PETF's TAR and Gas Compression work groups have helped industry in these key areas. Export system losses are a concern, and the PETF formed the Terminals work group in 2016 to focus on this issue. I'd like to thank all the industry volunteers who provide their time and knowledge to support the PETF, and it's great to see their hard work making a real difference."

Mike Tholen, Oil & Gas UK's upstream policy director, said: "Improving Production Efficiency has been a firm priority for the industry over recent years. Oil & Gas UK set up a special task force to improve performance and to ensure good practice is shared and it is encouraging to see these efforts over the past four years have helped to improve production from existing assets. The Production Efficiency Task Force is concentrating on improving hub shutdowns, gas compression and terminals' performance to safely minimise operations downtime and maximise flow rates to achieve the target of 80% PE in 2018.”

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