Movement on several developments on the U.K. Continental Shelf (UKCS) has given the region hope as operators continue working to reverse about a 15-year oil and gas production decline trend, which has been improving since 2015.

Siccar Point Energy Ltd. and Baker Hughes are moving forward to develop the Cambo Field, northwest of the Shetland Islands in the U.K.

The region’s biggest producers are still pumping. BP, for example, has plans to double its North Sea production to 200,000 barrels per day (bbl/d) by 2020, led by its Quad 204 and Clair Ridge projects. First oil is anticipated in 2018 for Clair Ridge, the west of Shetland Islands field where BP is targeting 640 million barrels (MMbbl) of recoverable resources. The company aims to pump up to 130,000 bbl/d from its Quad 204 redevelopment project, where production started in May.

Plus, the region—among the oldest for oil and gas production—still manages to capture attention from companies that see value. Total scooped up Maersk Oil and Gas’ North Sea assets in a $7.45 billion deal that is set to close in first-quarter 2018.

However, a production decline may be forthcoming despite the recent strides.

“The combination of new projects coming off plateau, combined with background decline from mature fields, means total production from the UKCS is expected to fall rapidly in the early 2020s,” Westwood Global Energy Group analyst said in a report.

The U.K.-based energy consultancy said UKCS production is expected to reach 1.9 million barrels of oil equivalent per day (MMboe/d) in 2018. This comes after having peaked in 1999 at more than 4.6 MMboe/d, then plummeting to 1.4 MMboe/d in 2013.

Westwood Global Energy, U.K. Continental Shelf, oil and gas production, UKCS, North Sea

The UKCS still has plenty of resources. Problem is that developing some of these resources isn’t economic. Only two projects were sanctioned in 2017.

Westwood said 496 unsanctioned discoveries on the UKCS hold an estimated 8.5 Bboe of resources. Only 32 of the 496 discovered are considered economic at an oil price of US$60/bbl.

However, technology is capable of changing that.

“A further 1.5 Bboe could become economic, but would require a commercial or technical innovation to bring costs down,” the report said. “One 1 Bboe of this resource is contained within a handful of discoveries: Rosebank and Cambo, fractured basement discoveries on the Rona Ridge (all West of Shetland) and the HP/HT Jackdaw discovery.”

With a design capacity of 100,000 bbl/d of crude and 80 million cubic feet of natural gas per day, the Chevron-operated Rosebank development will include a FPSO vessel. Rosebank is located 30 km northeast of Cambo, which is 100% owned and operated by Siccar. The company also holds a 20% nonoperated interest in Rosebank—positions gained through its acquisition of OMV (UK) Ltd.

“Cambo is a large basement high with sedimentary sequences draped over the top of the structure. Like Rosebank, it sits on the Corona Ridge structural feature,” Siccar said on its website. “The main reservoir is the Tertiary Hildasay Sandstone of fluvial/deltaic origin with very good reservoir qualities. Over 100 million barrels of recoverable resource has already been discovered.”

The Shell-operated Jackdaw Field, located in the Central North Sea, holds gas and condensate in Jurassic sandstones and could produce more than 100 MMboe when fully development, according to Siccar, which sold its 26% nonoperated interest in the field in November to Dyas.

“Due to the size of these projects, it would likely be the mid-2020s before first production, should commercial development options be realized,” according to the report. “Recent activity may yet stimulate firmer development activity in two of these projects; the Rosebank and Jackdaw which have combined resources estimated at 430 MMboe. The results of the tender for an FPSO for Rosebank, with submissions due by end March 2018, will be a key factor in determining the commercial viability of the development.”

The analyst, however, called the short-term rise in production a positive for the mature basin.

“But a steep decline is to come,” Westwood warned. “Companies and the government will need to look at how they can deliver commercial resources from the suite of discovered small pools and bring through the large, but more technically challenging discoveries.”

The UK Oil & Gas Authority said there are more than 300 oil and gas “small pools”—those having accumulations of less than 50 MMboe—that aren’t being pursued by companies. The reasons vary, according to the authority: some have low expected returns, production is uncertain and others are stranded.

An effort is underway to promote development of such fields, and technology is expected to play a key role.

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Velda Addison can be reached at