Major gas find boosts UK offshore industry

The discovery of a major gas field west of the Shetland Isles has been hailed as "great news" for UK energy security by the country's Oil and Gas Authority (OGA).

Major gas find boosts UK offshore industry
A major gas field has been discovered west of the Shetland Isles. With estimated recoverable reserves of one trillion cubic feet, the discovery in the Glendronach field by French energy giant Total will result in gas feeding into the Shetland Gas Plant.The company said tests had confirmed "good reservoir quality, permeability and well production deliverability".

Significant gas field exploration potential

Arnaud Breuillac, Total's president of exploration and production, said, "Glendronach is a significant discovery for Total which gives us access to additional gas resources in one of our core areas and validates our exploration strategy."Located on an emerging play of the prolific west of Shetland area, the discovery can be commercialised quickly and at low cost by leveraging the existing Laggan-Tormore infrastructure."

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Andy Samuel, chief executive of the OGA, said the region off the Shetlands had “significant exploration potential” and that he wanted to see more activity there.“We welcome Total’s announcement of a gas discovery on the Glendronach prospect, west of Shetland. This discovery is clearly great news not just for Total and the Shetland Gas Plant, but as a gas discovery, it’s great news for the UK’s security of supply," he said“We know West of Shetland has significant exploration potential; some 10 trillion cubic feet of gas, which is why we’re supporting industry’s West of Shetland Area Plan to progress exploration and development in the region.“We want to see more activity in the region and we recently made some of these areas available in the current 31st Offshore Licensing Round, which will close on November 7, and intend to make more acreage in the West of Shetland available for next year’s 32nd Offshore Licensing Round.”

Fast commercialisation of the gas fields

Deirdre Michie, chief executive of the industry association Oil and Gas UK, added, “This is a major discovery by Total which demonstrates the exciting potential the West of Shetland frontier region holds. The focus on quick commercialisation of this find, made viable by the UK Continental Shelf's existing infrastructure, provides motivation for investors as well as industry.“As our Economic Report recently highlighted, an increase in drilling activity is key to unlocking the remaining potential of the UKCS. This significant discovery demonstrates that the improved competitiveness of the basin is having positive results. This is thanks to the hard work undertaken by industry since the downturn.“It also highlights what can be achieved when companies maximise the potential yield from their existing blocks. This increased activity is critical as we look to maximise economic recovery from the UK Continental Shelf and realise Vision 2035.”

Great news for the oil and gas industry

The gas find came as welcome news for the UK oil and gas industry which, although recording a healthy recovery since the slump in oil prices in 2014, has seen a slump in exploration activity this year.In its Economic Report earlier in September, Oil and Gas UK said that only four new oil and gas wells had been drilled in the North Sea in the first eight months of the year and that, on the most optimistic predictions, only 12 were expected by year's end – the lowest total since 1965.“Record low drilling activity, coupled with the supply chain squeeze, threaten industry’s ability to effectively service an increase in activity and maximise economic recovery,” commented Ms Michie.Nevertheless, North Sea oil and gas companies are predicted to generate a £10 billion cash surplus this year, providing the Treasury with £2 billion in tax receipts.The report found that the crude price rally since late 2016, along with moves to increase the sector's efficiency, had sparked a dramatic improvement in the finances of the North Sea industry.
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