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PROSPEX 2016
Exploration Forum
Business Design Centre, Islington 14th December 2016
PROSPEX 2016 | London
Exploration
Forum
Agenda • Introduction
• MER Exploration Board and Forum Review of Status and Next Steps (Phil Kirk, Chrysaor)
• Exploration Strategy Overview (Nick Richardson)
• Government Seismic Programme Update (Jim Ross)
• New Acquisition
• Reprocessing Projects
• Regional Maps and 21CXRM Projects (Malcolm Gall & Andy Alexander, Siccar Point)
• LR Project Status
• SWB and ESP Projects – Phases 1 & 2
• Future Projects
• Enhanced Asset Stewardship (Scott Robertson)
• E&A Stewardship (Paul Herrington)
• E&A Expectations
• Drilling Activity Update - 2016 review and forecast
• Licensing Activity (Nick Richardson)
• AOB
PROSPEX
Exploration Board
Phil Kirk
Chrysaor
Exploration Board
Actions defined in Exploration Delivery Programme Board Seeking Nominations for New Members in 2017
Exploration Board: Progress/Highlights 2016 Strategy
• Exploration Strategy published 24 October 2016 • Exploration Forums established in London and Aberdeen on quarterly basis • Exploration & Appraisal Asset Stewardship Expectations Published • Successful Promotion of the UKCS at domestic and overseas conferences
Seismic • Release of 2015-2016 Government Funded Seismic Data • 2016-2017 Seismic Acquisition completed safely and within budget by mid-October, and processing work now underway • Extensive legacy seismic dataset selected for re-processing, plus well data package clean-up. • Evaluations undertaken for industry seismic Group Shoots
21st Century Roadmap • Completion of BGS Palaeozoic Study (due for publication at time of 29th Round awards) • Completion of Well Lookback Study (published on OGA website) • Areas selected (East Shetland Platform & SW Britain) for 2016-2017 Geotechnical Studies by Technical Advisory Committee. • 21st Century Roadmap Committee scoping future projects in ‘mature’ areas.
Licensing • Innovate Licence approach developed by task group and implemented for 29th Round • 29th Licence Round closed, with 29 applications covering 113 blocks • Model Clause Consultation in progress (close 6th Jan 2017) to formalise Innovate licences in Seaward Production Licence Model
Clauses for 30th Round • Fees and Levy Consultation (closed 5th Dec 2016) • Supplementary Licensing Round launched (14 blocks; closes 7th March 2017) • 30th Round Preparation for 2017
PROSPEX
Exploration Strategy Overview
Nick Richardson
OGA Exploration & New Ventures Manager
Exploration Strategy
Actions defined in Exploration Delivery Programme
Regulate:
Licence
Stewardship
Promote:
Regional
Exploration
Influence:
Technical
Assurance
• Licensing Activity
• Optimise Acreage Use
• Monitor Work Programme
Delivery
• Play Based Exploration
• Data and Knowledge Sharing
• Global Promotion
• Portfolio Management
• Improve Technical Standards
• Remove Barriers to Activity
Strategy Defines Key Areas for Industry and OGA Efforts
https://www.ogauthority.co.uk/media/2835/exploration_strategy_master.pdf
Exploration Strategy
Actions defined in Exploration Delivery Programme Actions defined in ten areas
https://www.ogauthority.co.uk/media/2835/exploration_strategy_master.pdf
PROSPEX
OGA Seismic Programme
Jim Ross
OGA Principal Geophysicist
East Shetland Platform
Status and Milestones
• 7762 km of PGS
GeoStreamer data
• Survey Completed 30th Sept
• Processing completion
March 2017
• Pre-Migration processing is
nearing completion
• Major processing steps
concluded to date: De-Ghost,
Broadband Optimisation,
DeNoise, Multiple
Attenuation & Coarse
Velocity Grid
SW Britain
Status and Milestones
• 5,849 km of WesternGeco
Q-Marine Data
• Survey Completed 7th
October 2016
• Pre-imaging workflow
testing to be completed by
mid December.
• Imaging velocity analysis
now underway
• Processing completion
March 2017
• Create a low-cost regional grid across
the UKCS in key prospective areas
• Explore the use of modern processing
algorithms for better imaging and
imaging deeper
• Complementary to new data acquired in
2015 and 2016 especially in areas that
are environmentally sensitive or difficult
to access
• Provide ties to regional well control
• Seek access to both multi-client and
proprietary seismic data
Legacy Reprocessing Update
Selection Criteria
• Phase One ~ 16,300 km of 2D data:
• SW Approaches ~1,630 km
• Northern Approaches (Bristol Channel) ~1,900 km
• Northern Approaches & Cardigan Bay ~1,300 km
• Cardigan Bay ~3,330 km
• Morecambe Bay ~1,100 km
• East Shetland Platform ~4,380 km
• Minches and Firth of Clyde ~ 2,660 km
• Phase Two ~ 10,270 km of 2D data:
• Offshore Anglo-Paris Basin ~6,200 km
• Onshore Anglo-Paris Basin ~300 km
• Offshore SW Approaches ~2,250 km
• BIRPS data in SW Approaches and
English Channel ~880 km
• Onshore data on Skye around Upper
Glen well ~90 km
• Solway Firth and Unst Basin ~550 km
Two separate phases have been initiated. Phase two possible due
to bid costs for phase one coming in under estimated total cost.
Reprocessing Headlines
Actions defined in Exploration Delivery Programme Total Reprocessing Phase 1 & 2: 26,570 km 2D Data
PROSPEX
Regional Projects & 21CXRM
Malcolm Gall, OGA Senior Geologist, Regional Exploration Team
Andy Alexander, Siccar Point Energy
Regional Projects
• Regional Geological Maps Project – 3 year contract awarded to Lloyds Register
• Continuation of the 21st Century Exploration Road Map (21CXRM) initiative
• Collaboration with companies to facilitate release of additional data into the public domain
• Three 2 year Post-Doctoral Projects linked to Government seismic acquisition programmes
• all now underway with PDRAs recruited
• Heriot-Watt University - Evaluating the Geological Structure and Hydrocarbon Prospectivity of the Western Platform and MNSH areas of the CNS
• Aberdeen University - Evaluating the Prospectivity of Rockall: towards a complete view of the petroleum system West of Britain
• Durham University - New Appraisal of the Western Approaches Basins
Regional Geological Maps Project
• Three year contract awarded to Lloyds Register to provide a set of key geological maps for the whole of the UKCS
• Published maps and associated databases designed to facilitate regional, play-based exploration in both frontier and more mature areas
• Integration of wells, seismic and other relevant data types where available
• Areas will be published out as they are completed • Starting with CNS/MF • Aiming to publish maps in April 2017
21st Century Exploration Road Map
• Future projects to be formulated by Technical Advisory Committee and endorsed by MER UK Exploration Board
• Technical Advisory Committee composed of OGA and 10 industry technical representatives:
• Prioritised projects will be in line with on-going exploration initiatives & future licence round activity
• 21CXRM Palaeozoic project will be published once the 29th Round awards have been made (or 1st July 2017 at the latest)
21CXRM: New Projects
1. East Shetland Platform
2. SW Britain
• Phase 1 will be completed by end March 2017 – Funded 100% through OGA budget contribution
• Results from both projects will be released into the public domain once completed and prepared for publication
• Potential Phase 2 could include: – Integration of 2016 Government seismic and potential fields data sets
– Analysis of new geochemical samples to further understand source rock potential & maturity
– Analysis of potential reservoir distribution and quality for stratigraphic intervals of interest
• Industry funding will be requested in Q1 2017 to enable continuation of these and other future 21CXRM projects
21CXRM Current Project: East Shetland Platform Phase 1
• Focus on key subsurface uncertainties:
– understanding the structural evolution and basin geometries
– an assessment of potential source rock presence and expected maturity
• Currently tendering for the following Phase 1 studies:
• Evaluation of the structural evolution of the East Shetland Platform area primarily using potential fields data but also integrating any other available data sets
• Assessment of source rock potential using non-seismic geochemical methods e.g. compilation & interpretation of available raw geochemical data, collection new geochemical samples and compilation & interpretation of relevant seep data.
• Focus on key subsurface uncertainties:
– assumed lack of source rock plus petroleum system timing issues associated with phases of uplift, erosion and thermal activity
– Lack of clarity of offshore basin geometry & structural and stratigraphic correlation
• Currently tendering for the following Phase 1
studies:
• Compilation of processed gravity & magnetic potential fields data across the SW Approaches & Western Europe
• Comprehensive literature review of the late and post Variscan basins of Western Europe, specifically focused on source potential of the Late Carboniferous to Lower Permian intervals.
• Initial assessment of the possibility of Late Carboniferous terrestrial source rocks in the SW Approaches, including a compilation of existing relevant geochemical data.
21CXRM Current Project: South West Britain Phase 1
21CXRM Current Project: South West Britain Phase 1
Plymouth Bay Basin Saar Nahe Basin
DEKORP 1C
McCann et al., 2006 (after Henk, 1993)
SWAT 9
MER UK in Practice
Asset Stewardship Strategy
Scott Robertson, OGA Area Manager – Central North Sea
Effective Asset Stewardship
Asset stewardship has evolved under MER UK
Asset owners consistently do the right things to
identify & then exploit opportunities
Assets are in the hands of those with the
collective will, behaviours & capabilities to
achieve this
OGA Regulatory Framework
Regulatory framework underpins approach and priorities
Legislative Context
Supporting Obligations
Execution
Guidance
Sanction Notices
Statutory, non-statutory and Stewardship Expectations
Enforcement notice
Financial penalty notice
Operator removal notice
Licence revocation notice
Central Obligation
Infrastructure Act 2015
Regulatory Powers Meetings Licence
model clauses
MER UK Strategy: ‘to take the steps necessary to secure that the
maximum value of economically recoverable petroleum is recovered’
Exploration Regional development Asset stewardship Technology Decommissioning
Collaboration
Cost reduction
Principal Objective The principal objective is that of ‘maximising the economic recovery of UK petroleum’
Energy Acts 2011 and 2016 Petroleum Act 1998
Regulatory powers MER UK plans Strategies and delivery
programmes Licensing regime Facilitation
Information and
samples
Non-binding dispute
resolution Third party access Sanctions
Asset Stewardship Framework
Asset Stewardship Expectations key tool to evaluate performance
Expectations for
industry, across the
lifecycle, which, if
followed, are intended
to help facilitate the
delivery of the MER
UK Strategy
obligations
Benchmarking assets for:
• Production efficiency
• Recovery factor
• Operating cost
• Decommissioning cost
Results communicated
confidentially in a non-
attributable way to help
continuous improvement
Proactive, structured
and prioritised tiered
stewardship reviews,
based on intelligence
gathered
Priority given to the
greatest MER UK
impact
New single, annual,
UKCS Stewardship
Survey which replaces
nine previous surveys.
Reduces complexity,
time, effort and burden
on operators and the
OGA
Asset Stewardship Expectations
Asset Stewardship Expectations co-authored with industry
10 Asset Stewardship Expectations
JV Hub Strategy
E&A Work Programme
Optimum use of Subsurface Data
Licence Activity, Decision Points & Milestones
Robust Project Delivery
Production Optimisation
Information Management
Technology Plan
Collaboration
Planning for Decommissioning
Link to supporting obligations of
MER UK Strategy and/or Energy Act
Set out minimum expectations
of what good looks like
Expectations have a one page
overview & short guidance
Issued in 4Q 2016 with
implementation during 2017
Asset Stewardship Survey
Currently socialising with industry with launch in November
New Survey Existing Surveys
• Fallow & Licensing Review
• Exploration & Appraisal
• Reserves (PARS)
• Field Activity
• Production Efficiency
• Treasury Economic Forecast (TEF)
• Decommissioning (Insights)
UKCS Stewardship Survey
Nov 2017
Utilise & Review
17 Feb 2017
Preparation
1Q 2016
Assurance
16 Nov 2016
Submission
3Q 2016
• Rationalise numerous surveys into one high quality submission
• Data submitted by industry via new application on OGA Energy Portal
• Improve OGA asset stewardship capability & inform regional strategies
Benchmarking
Industry demand for benchmarking using statistically significant OGA dataset
• Success of Production efficiency benchmarking
• Additional benchmarks in development for 2017 • Recovery factor • Operating cost • Decommissioning cost Recovery Factor
• Screening tools
• Used in Operator Stewardship Reviews
• Published in non attributable manner
Tiered Stewardship Reviews
Tiered reviews: point of integration, value in discussion and actions
Future Past
• Operator sets the agenda
• General focus on operate phase
• Adhoc objectives
• OGA sets the agenda
• Focus on whole upstream lifecycle
• Data driven (Expectations, Annual
Survey, Benchmarking and Scorecards)
Main touch point between operator/licensee and the OGA
Vehicle by which the OGA facilitates improvement with industry
Prioritised, focused, structured, proactive
• Priority based on performance, scale & upcoming
decisions
• Tiered approach based on organisational level and
breadth of scope
Stewardship Plan Expectations
interviewed to harvest feedstock (Apr/May)
21 companies
input to specific content of Expectations (Jun-Sep)
33 companies
engaged through MERUK Boards (Aug-Sep)
19 additional companies
Engagement covering the breadth of the lifecycle
Industry Engagement in Numbers
Significant industry engagement on Strategy and Expectations
A diagonal slice across industry
Licensees with exploration focus
Multinational through to midsize
Operators across the lifecycle
Non-operated licensees
Tier 1 contractors
Infrastructure owners
Trade bodies
Interviews between 5 April and 5
May 2016
21 Companies
interviewed
33 Companies
consulted
Company & MER UK Asset
Stewardship Board input &
engagement
76 Professionals
interviewed
97 Professionals
Consulted
Key Messages
OGA facilitating stewardship with a proactive industry
Asset Stewardship has evolved under the MER UK Strategy
Spans full oil and gas lifecycle
Components which:
10 Stewardship Expectations defining the right practices
Strategy and components developed with significant industry engagement
2017 first full year of new stewardship cycle
Define the right things, right behaviours for the first time
Efficiently collect and provide the right information / data / benchmarks
Culminate in prioritised, structured reviews, focused discussion on OGA/ industry priorities
PROSPEX
E&A Stewardship
Paul Herrington
OGA Exploration Portfolio Manager
Portfolio Team • Custodians of Prospects + Unsanctioned discoveries
• Delivery of E&A work programmes
• Technical Assurance
• Portfolio Analysis & Yet-to-Find
• Licence Rounds
• BGS Outsourced Contract
• Stewardship
OGA became a GOVCO on 1st October 2016 with additional powers and sanctions
Gunther Newcombe (Operations Director)
Gemma Milne (PA)
Brenda Wyllie WOS/NNS AM
Scott Robertson CNS/MF AM
Eric Marston SNS/EIS AM
Nick Richardson EXP & NV Manager
Paul Herrington Portfolio
Jim Ross Principal
Geophysicist
Jen Brzozowska Exploration
Licensing
Jo Bagguley Principal Regional
Geologist
Peter Napier Government Seismic Prog.
Giles Watts Processing
Geophysicist
Mark Ibram Processing
Geophysicist
Malcolm Gall Regional Geologist
Claire Black Technical Analyst
Andy Upton Licensing
Geoscientist
Kim Moss Administrative
Support
Senior Explorer WOS/NNS
Senior Explorer CNS/MF
Joy Gray SNS/EIS
Annual Survey
Portal based on long-running O&GUK DECC joint survey
Focussed on drilling activity, 3-year look-ahead + prior year actuals
E&A Stewardship
Asset owners consistently do the right things to identify & then exploit opportunities
Tier Reviews
Annual Tier 2 reviews linked to Survey;
UKCS, ref long-running Fallow Reviews, E&A work programmes
Single-asset Tier 3 reviews linked to Expectations
OGA agenda, meetings only where required
1 JV Hub Strategy
2 E&A Work Programme
3 Optimal Subsurface Data
4 Licence Activity
5 Robust Project Delivery
6 Production Optimisation
7 Information Management
8 Technology Plan
9 Collaboration
10 Decommissioning
Expectations
E&A Stewardship in Practice
Consistent, timely engagements, minimise work additions
Capture technical & economic evaluations
Support with any JV issues & decision-making [eg. Contingent wells]
>1 month prior to decision [18 months ahead of term expiry]
Independent review, share lessons learnt
Agree plans for WONS submission & ops communication
>3 months pre-spud
Assess & improve overall exploration performance
Support appraisal and development plans
Initial results <1, review <6, discovery appraise/dev plans <12 months
Annual Work Programme Ensure licensees pursue & exploit all opportunities [Resources]
Advancement of committed work programme & relinquishment
Expectation Outcome & Timing
Ensure JV alignment, facilitate work commitments progression
<6 months of award, fully signed and executed JOA
Well Investment /
Relinquishment
Pre-well
Post-well
Joint Operating Agreement
Tim
ed
to
lic
en
ce
wo
rk p
rog
ram
me
Operations
Informed eg. cc.d on weekly reports, consulted on major deviations
Reservoir section, agreement that commitments fulfilled, initial results
Op
tim
al d
ata
, te
ch
nolo
gy,
pro
cesses &
skill
s
JV assesses value at Bid and Annually
E&
A fa
rm-o
ut / d
ive
stm
en
t a
ctivity
OGA comment on practices and timescales
prior to commencing
E&A Stewardship Next Steps
Asset Stewardship Expectations co-authored with Industry
Expectations published & now putting into practice -
full engagement in 2017
• Implementation guides Q1 2017
Developing systems and requests:
• Want to take on feedback
Exploration Appraisal Firm Contingent Other
2016 2017 2018
Laverda
CN
S N
NS
SNS
/ EI
S W
oS Loanan
Skipper
FarragonS
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Lancaster
Komodo
Bagpuss
Ravenspurn
Lincoln
Finlaggan
Eagle
Templewood
Winchelsea
Belinda
Halifax
Maclure S
Storr W Storr E
Slough
Kinord West East
2016-2018 E&A Well Look-ahead
2017 not all approved and contracted Well intent: Licence commitment:
PROSPEX
Licensing & AOB
Nick Richardson
OGA Exploration & New Ventures Manager
Licence Rounds
30th Round will offer Significant Acreage in Producing Basins
Supplementary
Licensing Round
Innovate Licence Terms will Apply
• 14 Blocks on Offer • Details on OGA Website
• Nominations by Industry • Where early licensing before 30th
Round may accelerate activity
• Round Closes
• 7th March 2017 at 16:00 GMT
https://www.ogauthority.co.uk/licensing-consents/licensing-rounds/
OGA Powers to Attend Meetings if Necessary
OGA JV Meeting Attendance Meetings: Statutory Notice Under Part 2, Chapter 4 (Meetings) Of The Energy Act 2016
• OCMs & TCMs on OGA Opportunity Matrix
• Major Project Review Meetings (>£300MM)
• Exploration and Appraisal Well Pre-Investment Meetings:
Meetings where there is technical peer review on prospects
and undeveloped discoveries, with the intent that this will
lead to an investment decision regarding Exploration and
Appraisal (E&A) wells
• Written Notice >14 days Prior to Meeting to:
[email protected] • OGA may choose to attend
• In any case, all materials and meeting summary must be sent
to OGA
Other Business
• Model Clause Consultation on OGA Website (closes 6th January 2017)
• Please inform OGA (incl. Jen/Licensing Admin as appropriate) of any changes in organisation, personnel, address, etc.
• It is the Licensee’s responsibility to request licence extensions, amendments, etc in good time, preferably three months prior to deadlines, and no later than one month prior.