BP's double proves there's life in the old dog yet
Following UK supermajor BP's announcement of two discoveries on the UKCS in 2017, Fiona Legate, Senior Analyst, North Sea Upstream at Wood Mackenzie said: “BP's discoveries are a welcome boost to the mature UKCS. The majors still have appetite for mature plays and as we can see, there is life in the old dog yet."
She added: "This is great news for the UKCS but the materiality of these discoveries is unknown at this stage."
The majors operated around 30% of the 22 exploration wells drilled in the UKCS last year. BP and Statoil were the most active. Last year saw the return of this group to exploring in the region, as attention turned to growth opportunities.
BP has 100% in the Capercaillie discovery in the Central North Sea. It is the operator of the Achmelvich discovery in the West of Shetland and its partners are Shell, ConocoPhillips and Chevron.
Ms Legate said: "It's early days in terms of assessing development options for the two discoveries and further drilling may be need to firm up future plans. Both fields are near producing infrastructure and could be fast-tracked into production in the near term.
“Despite its recent divestments in the North Sea, BP clearly is clearly still committed to the UK. It plans to double production by 2020 to 200,000 b/d. Development of these two discoveries, plus other opportunities in its portfolio will help to achieve this target. Production from the core West of Shetlands developments Clair and Schiehallion will ramp up over the near term. We estimate BP’s UK production will reach 180,000 b/d in 2020 which highlights the gap future investments can help to fill."
She added: “In general, there is very little transparency on new discoveries in the UKCS. The only official number released for discovered resource in 2017 is 172 mmboe, and that comes from the OGA. Companies have up to five years to reveal well results after making a discovery. We view this as a blocker to investment. Switching to a Norwegian-style model of announcing reserves at the time of discovery could help the supply chain to evaluate new business opportunities. It would also help other explorers to make better decisions.”