ukooa/dti industry activity survey 2002 presentation to...
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UKOOA Activity survey 2002 EAG/09/02
11th November 2002
UKOOA/DTI Industry activity survey 2002
Presentation to EAG 11th November 2002
Ray Hall-EAG
UKOOA Activity survey 2002
11th November 2002
UKOOA 2002 Survey- Context! In August 2002 a joint DTI/UKOOA survey was launched to gather
data on all identified projects across the UKCS.
" Identifies all projects in Operators portfolio ranging from fields in production to Possible developments.
" Copies of all data send to DTI
" Prof Alex Kemp engaged to aggregate data.
" Exploration & Appraisal activity excluded
! Data presented on Risked basis
" Probable & Possible Projects slipped according to probability
Probability Years delaybelow 20% 420% to 39% 340%-59% 260% to 79% 1above 80% (no delay) 0
UKOOA Activity survey 2002
11th November 2002
Project distribution
Number of fields/projects
Oct 2002 Survey
Oct 2001 Survey
Sept 2000 Survey
Sanctioned 260 248 257Incremental 144 96 97Probable 51 64 65Possible 33 84 56Total 488 492 475
Fewer Probable & Possible projects but more projects in mature fields
UKOOA Activity survey 2002
11th November 2002
Exploration success
! Impact of new exploration success since last survey
! Three new fields
"Represent 46 mmboe
# Of this 23 mmboe is oil
UKOOA Activity survey 2002
11th November 2002
Changes to Possible project portfolio
84 -1 -47
-10-12 6
13 33
-60
-40
-20
0
20
40
60
80
100
2001
Possibles
Now sancti
oned
Remove
dMove
d to Pro
bable
Moved to
Incre
mental
Probables
nowPoss
iblesNew
entra
nts20
02Poss
iblesNum
ber o
f Pro
ject
s
UKOOA Activity survey 2002
11th November 2002
Production
UKOOA Activity survey 2002
11th November 2002
-500
1,0001,500
2,0002,500
3,0003,500
4,0004,500
5,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mbo
epd
2002 survey2001 survey
Oil & gas production forecast
Production lower by 374 million boe
Little change to 2010 production
UKOOA Activity survey 2002
11th November 2002
UKCS production to 2020
-500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Mbo
epd
2002 survey
2001 survey
Production lower by 412 mmboe
UKOOA Activity survey 2002
11th November 2002
-
1,000
2,000
3,000
4,000
5,000
6,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Prod
uctio
nm
boep
d
2002 survey2001 survey2000 survey
Significant production fall since year 2000
2001-2010 production billion boe2000 survey=13.9 2001 survey=13.22002 survey =12.9
UKOOA Activity survey 2002
11th November 2002
-
500
1,000
1,500
2,000
2,500
3,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Oil
prod
uctio
nm
bpd
Possible ProbableIncrementalSanctioned
Oil production
No change in 2001-2010 oil production
UKOOA Activity survey 2002
11th November 2002
Gas production
!Significant fall compared to 2001 survey
!2002-10 production lower by some 2.2 TCF
-
2,000
4,000
6,000
8,000
10,000
12,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gas
mill
ion
scfp
d
2001 survey2002 survey
-
2,000
4,000
6,000
8,000
10,000
12,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gas
pro
duct
ion
mm
scfp
d
Possible ProbableIncrementalSanctioned
UKOOA Activity survey 2002
11th November 2002
Gas production changes 2001 to 2002
-
2,000
4,000
6,000
8,000
10,000
12,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Gas
Mill
ion
scfp
d
2001 survey2002 survey
-200400600800
1,0001,2001,4001,6001,8002,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gas
Mill
ion
scfp
d
2002 survey2001 survey
Incremental
Sanctioned
-500-500
1,0001,5002,0002,500
3,0003,5004,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010G
as m
illio
nsc
fpd
2001 survey
2002 survey
Probable & Possible
UKOOA Activity survey 2002
11th November 2002
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Prod
uctio
nm
boep
d
Possible ProbableIncrementalSanctioned
Oil & Gas Production- elements
PILOT Vision
Intermediate target
307 mboepd gap
667 mboepd gap
Missing elements:•Exploration•Undeveloped discoveries•Brown fields
UKOOA Activity survey 2002
11th November 2002
Reference- PILOT Vision assessment March 2002
20th March 2002
EAG presentation to PILOT
-
5001,0001,500
2,000
2,500
3,000
3,5004,000
4,500
5,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mbo
epd
ExplorationTechnical reservesPossibleProbableBrown fieldsIncrementalSanctioned
EAG Central case projection
PlLOT Vision
Target 2005
!Gap to Vision made up from
" Exploration,
"Brown fields
"Technical reserves
!Now more difficult
"Low Exploration
"Fewer new projects
!More reliant on Brown fields
UKOOA Activity survey 2002
11th November 2002
UKCS production by area
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Mbo
epd
WOSNNSCNSMFIrish seaSNS
UKOOA Activity survey 2002
11th November 2002
Probable & Possible developments by area
-100-100200300400
500600700800900
1,00020
01
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Mbo
epd
WoSNNSCNSMFIrish Sea SNS
UKOOA Activity survey 2002
11th November 2002
Incremental projects by area
-100
-
100
200
300
400
500
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Mbo
epd
WoSNNSCNSMFIrish Sea SNS
UKOOA Activity survey 2002
11th November 2002
UKCS production by tax regime
-500
1,0001,5002,0002,5003,0003,5004,0004,500
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Mbo
epd
Post 1993Post 1982Pre 1982CT,SCT
PRT,CT,SCT
Royalty,PRT,CT,SCT
UKOOA Activity survey 2002
11th November 2002
Costs
UKOOA Activity survey 2002
11th November 2002
-
1,000
2,000
3,000
4,000
5,000
£ m
illio
n re
al
2002 survey2001 survey
2002 survey 3,614 3,971 3,361 2,881 2,801 2,370 1,814 1,114 612 567
2001 survey 3,810 3,631 3,248 2,911 2,908 1,815 1,118 817 583 458
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Capex comparison
Capex 2002-2006 increased by £0.9 billionCapex 2003-2007 increased by £1.2 billion
2003 spend likely to be below 2002 levels
UKOOA Activity survey 2002
11th November 2002
Capex build up
Probable spend may slip- few projects sanctioned since Budget
-
1,000
2,000
3,000
4,000
5,000
£ m
illio
n re
al
Possible ProbableIncrementalSanctioned
Possible - - - 0 68 329 492 366 187 321 Probable 13 183 629 881 1,314 1,165 714 425 136 19 Incremental 1 12 653 745 709 539 377 166 138 92 Sanctioned 3,599 3,776 2,078 1,255 710 337 231 158 152 136
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
Capex by type
-500
1,0001,5002,0002,5003,0003,5004,0004,500
£ m
illio
n re
al
Other capexDrilling
Other capex 1,698 1,834 1,596 1,380 1,503 1,252 822 491 276 402
Drilling 1,916 2,137 1,765 1,501 1,298 1,118 992 624 336 165
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
Capex by area
-500
1,0001,5002,0002,5003,0003,5004,0004,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£ m
illio
n re
al
SNS Irish seaMF CNSNNS WOS
UKOOA Activity survey 2002
11th November 2002
UKCS capex by Tax vintage
-
1,000
2,000
3,000
4,000
5,000
£ m
illio
n re
al
Post 1993Post 1982Pre 1982
Post 1993 2,256 2,647 2,383 1,928 1,834 1,750 1,416 890 426 399
Post 1982 621 711 448 486 454 284 185 103 85 80
Pre 1982 726 602 516 444 473 310 180 121 101 88
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
Operating costs
!Opex decline not matching production decline
!Opex/boe:
"2001= $4.1
"2010= $4.9
-500
1,0001,5002,0002,5003,0003,5004,0004,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£ m
illio
n re
al
Possible ProbableIncrementalSanctioned
-500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£ m
illio
n re
al
Tariffswell opexGeneral opex
UKOOA Activity survey 2002
11th November 2002
Opex comparison
-
5001,000
1,500
2,0002,500
3,000
3,5004,000
4,500
£ m
illio
n re
al
2002 survey
2001 survey
2002 survey 4,162 4,278 4,121 3,982 3,900 3,617 3,471 3,323 3,081 2,766
2001 survey 4,172 4,279 4,002 3,913 3,782 3,594 3,421 3,157 2,993 2,804
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
UKCS Opex/boe
2.00
2.503.00
3.504.00
4.505.00
5.50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Ope
x/bo
e
2000 survey2001 survey2002 survey
UKOOA Activity survey 2002
11th November 2002
Unrisked data
UKOOA Activity survey 2002
11th November 2002
Unrisked UKCS Production
-
1,000
2,000
3,000
4,000
5,000
6,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Prod
uctio
nm
boep
d
2002 survey
2001 survey
Production lower by 520 mmboe
UKOOA Activity survey 2002
11th November 2002
Unrisked capex
Capex 2002-2006 increased by £1.5 billionCapex 2003-2007 increased by £2.5 billion
-
1,000
2,000
3,000
4,000
5,000
£ m
illio
n re
al
2002 survey
2001 survey
2002 survey 3,671 4,034 4,170 3,991 2,977 1,827 1,336 668 531 314
2001 survey 3,976 4,471 4,599 3,196 1,965 1,258 822 576 320 163
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
Unrisked capex build-up
-
1,000
2,000
3,000
4,000
5,000
£ m
illio
n re
al
Possible ProbableIncrementalSanctioned
Possible - 15 306 553 357 113 252 291 218 72 Probable 71 231 1,132 1,438 1,201 838 476 52 24 15 Incremental 1 12 653 745 709 539 377 166 138 92 Sanctioned 3,599 3,776 2,078 1,255 710 337 231 158 152 136
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
UKOOA Survey- Statistics (2002 Survey)
Field Category No of Fields Reserves Million boe Capex £ millions
Sanctioned fields 260 (248) 10788 (9798) 9256 (4807)
Incremental 144 (96) 1643 (1756) 3568 (3384)
Probable fields 51 (64) 2218 (2745) 5498 (6729)
Possible fields 33 (84) 933 (1669) 2391 (3491)
Total 2002-2040 488 (492) 15581 (15969) 20714 (18412)
Data from 1/1/2002Figures in brackets denote 2001 survey data
UKOOA Activity survey 2002
11th November 2002
Remaining reserves from 1/1/2002
5,969
919 1,216 683
4,819
7241,003
250-
2,000
4,000
6,000
8,000
10,000
12,000
Sanctioned Incremental Probable Possible
Res
erve
s m
illio
n bo
e Oil Gas
UKOOA Activity survey 2002
11th November 2002
Sanctioned activity Production
Capex
Capex up by £4.6 billion
Cost of £4.2 ($6.3/boe)
Production increased by 1088 mmboe to 2020
-
1,000
2,000
3,000
4,000
5,000
6,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Prod
uctio
nm
boep
d
2002 survey2001 survey
-
5001,000
1,5002,000
2,500
3,0003,500
4,000
£ m
illio
n re
al
2002 survey
2001 survey
2002 survey 3,599 3,776 2,078 1,255 710 337 231 158 152 136
2001 survey 3,472 2,029 894 457 377 215 149 115 77 61
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
UKOOA Activity survey 2002
11th November 2002
Removal costs- Cumulative expenditure
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
£ m
illio
n re
al
2002 survey
2001 survey
Cumulative costs increased by £500 million to £8.7 billion
UKOOA Activity survey 2002
11th November 2002
Messages! Industry struggling to sustain production
" Production to 2010 lower by over 374 mm boe compared to 2001 survey# Gas production some 2.2 TCF lower- Oil production unchanged
! PILOT Targets more difficult to achieve" No progress in closing gap to 2010 production- further away in 2005
! Rising costs and operability challenges" Expect higher capex, but
# In combination with falling production trend is unsustainable ! Probable and Possible field portfolios significantly reduced (64 projects)
" Reserve contribution lower by over 1.3 billion boe# Fields sanctioned not being replaced by new discoveries or
acceleration of technical reserves." Incremental projects (Brown field activity) of greater importance
! High oil price sustaining development activity- so far
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