Discovery of biggest UK gasfield in a decade raises industry hopes

Gas from Glengorm reservoir under North Sea could meet about 5% of annual demand in the Uk.


One of the Elgin-Franklin rigs. Green groups said it was a disgrace that new oil and gas prospects were being developed. Photograph: Ken Taylor Photography/Total E&P UK Limited

A Chinese-led consortium has discovered the UK’s biggest gas field in more than a decade, leading experts to say there is life yet in the country’s offshore sector.

Drilling found the equivalent of about 250m barrels of oil could be recovered from the Glengorm reservoir in the central North Sea, about 5% of the UK’s annual gas demand.

The find was hailed as significant by industry and the regulator of the region’s last oil and gas reserves, where production has been declining since the turn of the century.

 

But environmental groups said it was a disgrace that new oil and gas prospects were being found and developed, given their contribution to climate change.

The Chinese firm CNOOC owns 50% of the Glengorm project, with a subsidiary of the Italian company Edison holding another 25% and the French oil firm Total owning the other 25%. The size of the find is the biggest since the Culzean find in 2008, and 11th largest of any kind in the UK in the past 30 years.

Total, which made another large gas discovery last September in west Shetland, has been behind many of the basin’s big discoveries in recent years.

The company said it would use existing platforms and infrastructure nearby to extract the gas, and the Glengorm prospect demonstrated its “capacity to create value in a mature environment”. Total tried to find gas in the area twice before, in 2017, but without success.

Kevin Swann, a senior analyst with the consultancy group Wood Mackenzie, said the size of find was “pretty significant” and he believed the field could be producing gas within 4 to 5 years via the existing Elgin–Franklin rigs.

The gas is in a reservoir with high pressure and high temperatures, meaning it will be more costly to produce than other gasfields. But Swann said the scale of the reservoir meant it would be economically viable to extract.

“The company needs to spend a lot more money on safety features and processing,” he said.

The Oil and Gas Authority said the the discovery was “very exciting news”.

Andy Samuel, the chief executive of the regulator, said the UK continental shelf still held an estimated 10bn-20bn barrels of oil and gas, “so there is every chance of yet more significant finds”.

The number of new wells being drilled has fallen in recent years; in 2018 it fell to a level last seen in 1965. However, the amount of oil and gas found has increased from 83m barrel of oil equivalent in 2014 to 175m in 2017.

Experts said the industry was experiencing an uptick as it recovered from the 2014-2016 slump in oil prices.

Two of the potential big new finds in 2019 are the Leon and Blackrock projects being drilled by the private equity-backed firm Siccar Point. “There’s certainly a rejuvenation. Companies are focusing on better prospects, rather than drilling everything,” said Swann.

Friends of the Earth called on the government to stop supporting new fossil fuel infrastructure. “It’s a disgrace that oil and gas exploration is still going ahead in the seas off Scotland,” said Caroline Rance, a climate campaigner at the group.

 

 

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