Scotland's Oil

[ayrmad]

Ian Wood's intervention has just highlighted that NO will do or say whatever it takes to secure a NO vote, good to see H_B and AdLib all over the hypocrisy of someone rubbishing their own findings with the aid of the MSM in attempt to mislead the electorate.

[Confidemus]

Ian Wood's intervention has just highlighted that NO will do or say whatever it takes to secure a NO vote, good to see H_B and AdLib all over the hypocrisy of someone rubbishing their own findings with the aid of the MSM in attempt to mislead the electorate.

How long before Ian Wood gets an ermine cloak in the event of a No vote?

[chomp my root]

With regards to west coast oil it does mean Trident.

Still no, Trident will have a part to play in the MOD's decision but they would apply to block it, it makes their life easier if things stay the same. IF oil was found in adjacent areas there would be renewed pressure to open up area's that are currently used for other things, ie MOD exercise areas and fishing. Trident submarines make up less than half the UK's fleet of submarines and they all require these areas, the non Trident submarines (fleet boats) require more 'play' in the inshore areas off the west coast than the Trident boats due to the nature of a lot of their operations.

Do you think a Scottish MOD would be any different ? You tossed Trident in as one of the SNP's 'evils' to back up an argument but even if you 'suspect' that Trident is to blame you don't know for sure.

[Blaven]

Has the industry just began to wake up to null and void contracts?

[renton]

Still no, Trident will have a part to play in the MOD's decision but they would apply to block it, it makes their life easier if things stay the same. IF oil was found in adjacent areas there would be renewed pressure to open up area's that are currently used for other things, ie MOD exercise areas and fishing. Trident submarines make up less than half the UK's fleet of submarines and they all require these areas, the non Trident submarines (fleet boats) require more 'play' in the inshore areas off the west coast than the Trident boats due to the nature of a lot of their operations.

Do you think a Scottish MOD would be any different ? You tossed Trident in as one of the SNP's 'evils' to back up an argument but even if you 'suspect' that Trident is to blame you don't know for sure.

SSN operations around the west coast of Scotland would likely be as gatekeepers and escorts for the SSBNS in and out of Faslane. So other submarine operations in these areas are still related to Trident, even if they are not Vanguard class Trident boats themselves.

[joozy]

Could it be that the industry is getting a different message to that which is being passed out to the public through the BBC and the rest of the mainstream media?

I would be shocked by that level of deceit. What with less than a month before the referendum.

Or could it be that nobody has said that there won't be new developments in the North Sea.

While I hope the excitement about Faroe helps push its share price up a bit, it's quite baffling to see the level of enthusiasm from some on here about what is a relatively small field. To put it into some context, on a risked NAV basis it accounts for about 10% of Faroe's total NAV - based on the current market cap that would imply the fields are worth around £30m to Faroe. It's not even that exciting a field for Faroe (a smallcap E&P company) - there's a lot more excitement there about Faroe's Norwegian assets. Also, this isn't a new discovery - these fields have been known about for many years. The modelling I've seen predicts the two fields will produce around 30kbpd for a couple of years from 2018 before entering a gradual decline before stopping around 10 years later. Of course, with enhanced recovery techniques etc, I suppose the life could be extended - but even then we're talking about a field which would only account for a tiny fraction of overall UKCS production.

Discoveries of this nature do nothing to either strengthen or disprove Ian Wood's central argument yesterday about overall declining production. While some assets like Perth/Lowlander/Bentley etc come on-stream, there will be other ones going off-stream.

It's also quite amusing to see that Ian Wood is now viewed by some as a unionist stooge and somebody not to be trusted......whereas I can't recall any such concerns being raised when he was producing works on education for the Scottish government or at the time of publication of the Wood Commission report.

[chomp my root]

SSN operations around the west coast of Scotland would likely be as gatekeepers and escorts for the SSBNS in and out of Faslane. So other submarine operations in these areas are still related to Trident, even if they are not Vanguard class Trident boats themselves.

Certainly part of the SSN's job is to delouse SSBN's but it doesn't really happen often. The inshore exercise areas are used to practice staying close to a coastline and not being detected amongst other things. While it's easier to use the area's they already have it would be hard to justify continuing to use them if they were sat on huge resources, the MOD would be told to find somewhere else. The off shore exercise area's could also be deconflicted quite easily, they might have to be further out but it would be a minor inconvenience really. The ego's of the guys at the top are more likely to be the deciding factor in not wanting to change things but if it was proven that it was a (black) gold mine in the area's involved the MOD will be told to move, their objections only go so far.

[renton]

Certainly part of the SSN's job is to delouse SSBN's but it doesn't really happen often. The inshore exercise areas are used to practice staying close to a coastline and not being detected amongst other things. While it's easier to use the area's they already have it would be hard to justify continuing to use them if they were sat on huge resources, the MOD would be told to find somewhere else. The off shore exercise area's could also be deconflicted quite easily, they might have to be further out but it would be a minor inconvenience really. The ego's of the guys at the top are more likely to be the deciding factor in not wanting to change things but if it was proven that it was a (black) gold mine in the area's involved the MOD will be told to move, their objections only go so far.

Yeah, but there are other inshore exercise areas they could use. The west of Scotland is used primarily because of it's convenience in terms of already being based at Faslane, and the cold war necessity to ensure the SSBN got in and out without being tracked.

After independence, Faslane will not operate in the same way - it won't be a submarine base (I still think we ought in the future to look at getting a few short range diesel subs, but the white paper envisages a surface fleet only) the entire sub fleet will have moved out and south. So whether folk conflate all subs with Trident is not imporant, both will be gone, theoretically freeing up those sites for potential exploration.

[Confidemus]

Or could it be that nobody has said that there won't be new developments in the North Sea.

While I hope the excitement about Faroe helps push its share price up a bit, it's quite baffling to see the level of enthusiasm from some on here about what is a relatively small field. To put it into some context, on a risked NAV basis it accounts for about 10% of Faroe's total NAV - based on the current market cap that would imply the fields are worth around £30m to Faroe. It's not even that exciting a field for Faroe (a smallcap E&P company) - there's a lot more excitement there about Faroe's Norwegian assets. Also, this isn't a new discovery - these fields have been known about for many years. The modelling I've seen predicts the two fields will produce around 30kbpd for a couple of years from 2018 before entering a gradual decline before stopping around 10 years later. Of course, with enhanced recovery techniques etc, I suppose the life could be extended - but even then we're talking about a field which would only account for a tiny fraction of overall UKCS production.

Discoveries of this nature do nothing to either strengthen or disprove Ian Wood's central argument yesterday about overall declining production. While some assets like Perth/Lowlander/Bentley etc come on-stream, there will be other ones going off-stream.

It's also quite amusing to see that Ian Wood is now viewed by some as a unionist stooge and somebody not to be trusted......whereas I can't recall any such concerns being raised when he was producing works on education for the Scottish government or at the time of publication of the Wood Commission report.

I like your overall level of amusement.

Are you equally amused by Professor Sir Donald Mackay's comments?

Do you find it tittersome that North Sea investment is at a 30 year high?

Are your sides splitting at N-56 describing the OBR's forecasts as "incredibly pessimistic"?

[chomp my root]

Yeah, but there are other inshore exercise areas they could use. The west of Scotland is used primarily because of it's convenience in terms of already being based at Faslane, and the cold war necessity to ensure the SSBN got in and out without being tracked.

After independence, Faslane will not operate in the same way - it won't be a submarine base (I still think we ought in the future to look at getting a few short range diesel subs, but the white paper envisages a surface fleet only) the entire sub fleet will have moved out and south. So whether folk conflate all subs with Trident is not imporant, both will be gone, theoretically freeing up those sites for potential exploration.

If there is an independent Scotland I wouldn't totally rule Faslane out as a submarine base, we'll be applying to join NATO and will need to 'contribute'. A ready made Nuclear submarine base with all the right Z berths would be one of our bargaining chips. You're right about the locality being convenient but as I said, if the areas next to the ones that they're 'not allowed' to drill in were full of oil the MOD would be told to shift, they have in the past for fishing boats and even the area's they 'share' are often heavily in favour of the fishing vessels. At the moment (I'm guessing) the amount of oil we're getting from elsewhere has meant that these west coast areas aren't a priority but if it became obvious that there was oil there, or if it was running out elsewhere the MOD would be told to move their exercise areas. I agree that there would need to be 'channels' for the BN's (as well as commercial traffic) due to the fact that they really only can be based in Faslane but that would be sorted I'm sure.

To be honest I don't think an independent Scotland would need boats, its OPV's that would be our main priority (and MPA's).

[renton]

If there is an independent Scotland I wouldn't totally rule Faslane out as a submarine base, we'll be applying to join NATO and will need to 'contribute'. A ready made Nuclear submarine base with all the right Z berths would be one of our bargaining chips. You're right about the locality being convenient but as I said, if the areas next to the ones that they're 'not allowed' to drill in were full of oil the MOD would be told to shift, they have in the past for fishing boats and even the area's they 'share' are often heavily in favour of the fishing vessels. At the moment (I'm guessing) the amount of oil we're getting from elsewhere has meant that these west coast areas aren't a priority but if it became obvious that there was oil there, or if it was running out elsewhere the MOD would be told to move their exercise areas. I agree that there would need to be 'channels' for the BN's (as well as commercial traffic) due to the fact that they really only can be based in Faslane but that would be sorted I'm sure.

To be honest I don't think an independent Scotland would need boats, its OPV's that would be our main priority (and MPA's).

Agree with this, MPAs in particular. The irony of it is that they cancelled the Nimrods after most of the expenses of that project had been incurred. They were ready to roll off the line. An exercise in PR, rather than actual money savings.

[git-intae-thum]

Or could it be that nobody has said that there won't be new developments in the North Sea.

While I hope the excitement about Faroe helps push its share price up a bit, it's quite baffling to see the level of enthusiasm from some on here about what is a relatively small field. To put it into some context, on a risked NAV basis it accounts for about 10% of Faroe's total NAV - based on the current market cap that would imply the fields are worth around £30m to Faroe. It's not even that exciting a field for Faroe (a smallcap E&P company) - there's a lot more excitement there about Faroe's Norwegian assets. Also, this isn't a new discovery - these fields have been known about for many years. The modelling I've seen predicts the two fields will produce around 30kbpd for a couple of years from 2018 before entering a gradual decline before stopping around 10 years later. Of course, with enhanced recovery techniques etc, I suppose the life could be extended - but even then we're talking about a field which would only account for a tiny fraction of overall UKCS production.

Discoveries of this nature do nothing to either strengthen or disprove Ian Wood's central argument yesterday about overall declining production. While some assets like Perth/Lowlander/Bentley etc come on-stream, there will be other ones going off-stream.

It's also quite amusing to see that Ian Wood is now viewed by some as a unionist stooge and somebody not to be trusted......whereas I can't recall any such concerns being raised when he was producing works on education for the Scottish government or at the time of publication of the Wood Commission report.

There is no surprise that a billionaire doesn't want to upset the aipple cairt.

Those who have personally done extremely well out of the industry, will no doubt be nervous of any transition. This I would imagine is because they foresee the possibility of a closer review of the taxation regime imposed on the larger companies.

Conversely whilst these companies and private individuals have made billions, the Scottish public has not seen the benefit.

The reporting of the Wood intervention has also been horribly skewed. He is not an expert in extraction. His opinion on the amount of barrels remaining is not comparable with other industry experts.

Further, his revised figure of 16 billion barrels, is still substantially higher than the laughable Westminster projections. That has been ignored by the media. Obviously that part of the story does not fit the agenda.

[MassiveFanDan]

I realise that and I'm certainly not happy with the Trident situation to put it mildly. One of my primary reasons for voting Yes is to get the nukes oot. I still can't believe that a majority of people in Scotland are happy to have these WMDs only 25 miles from the largest city in Scotland

One poll, rushed out on a politically sensitive issue at a very politically sensitive time, is not enough to show that the majority of the population are happy having nukes here. Most of the polls are no doubt trying to be as reliable as they can be under the circumstances, but that one reeked. A bit like the two polls on attitudes to currency union among the English and Welsh - the first showed a large majority in favour, the second (only weeks later) a vast majority against. Push-polling.

[chomp my root]

Agree with this, MPAs in particular. The irony of it is that they cancelled the Nimrods after most of the expenses of that project had been incurred. They were ready to roll off the line. An exercise in PR, rather than actual money savings.

The nimbats were 95% finished and they weren't even mothballed, the guys who built them then had to rip out all the clever stuff and then destroy the airframes, absolute lunacy. There are other smaller turboprop alternatives out there but I genuinely can't see it being an issue.

[MassiveFanDan]

if the areas next to the ones that they're 'not allowed' to drill in were full of oil the MOD would be told to shift, they have in the past for fishing boats and even the area's they 'share' are often heavily in favour of the fishing vessels.

http://www.sundaypost.com/news-views/politics/tories-blocked-oil-boom-in-the-clyde-heseltine-admits-1.446273

[joozy]

There is no surprise that a billionaire doesn't want to upset the aipple cairt.

Those who have personally done extremely well out of the industry, will no doubt be nervous of any transition. This I would imagine is because they foresee the possibility of a closer review of the taxation regime imposed on the larger companies.

Conversely whilst these companies and private individuals have made billions, the Scottish public has not seen the benefit.

The reporting of the Wood intervention has also been horribly skewed. He is not an expert in extraction. His opinion on the amount of barrels remaining is not comparable with other industry experts.

Further, his revised figure of 16 billion barrels, is still substantially higher than the laughable Westminster projections. That has been ignored by the media. Obviously that part of the story does not fit the agenda.

He really is an expert in extraction. And it's funny how his opinion on the amount of barrels remaining is derided now....and not months ago when the report was published.

As far as I'm aware, Ian Wood has been decidedly apolitical his entire life. Well...apart from the minor quibbling about the rejuvenation of Aberdeen city centre.

If you'd watched his interview, he even says that he thinks the OBR forecasts are too low. However, as he also rightly points out, it shouldn't be surprising that the OBR have been a bit cautious since they've continually missed on the high side over the past few years.

I'm also loving that N-56 is now being described as an 'impartial' body - especially when it's founder is a member of Yes Scotland's advisory board and its head author seems to have been on the receiving end of regular commission work from the SNP.

[DeeTillEhDeh]

http://www.oilandgasuk.co.uk/news/news.cfm/newsid/933

No response to this yet.

"Tuesday 25 February 2014

Oil & Gas UK Activity Survey highlights Industry Paradox

Oil & Gas UK publishes its Activity Survey 2014 today (25 February), highlighting the contradictions currently at play in the UK offshore oil and gas sector. The industry trade body’s annual report on oil and gas exploration, production and investment activities forecasts capital expenditure of around £13 billion in 2014, the second highest year for investment on record with spending likely to remain above £10 billion next year, following a record £14.4 billion in 2013.

The report also points to better than expected production last year. New developments and an increased focus on production efficiency saw an average of 1.43 million barrels of oil equivalent per day (boepd) produced in 2013, eight per cent lower than in 2012 but a significant improvement on the average yearly decline of 15 per cent experienced between 2010 and 2012.

Production is expected to pick up further in 2014 and, with 25 new fields expected to come on-stream over the next two years, production is projected to rise gradually to around 1.7 million boepd by 2018. By then, however, 40 per cent of production will come from new field developments, underlining the continued importance of finding new reserves and bringing them into production.

In contrast, with exploration, the industry is facing its biggest challenge in 50 years. Only 15 exploration wells were drilled in 2013, according to figures from the Department of Energy & Climate Change (DECC), continuing a steep downward trend since 2008 when 44 exploration wells were drilled. Exploration over the past three years has been at its lowest in the history of the UK Continental Shelf (UKCS) and in 2013 replaced just 80 million barrels.

Oil & Gas UK chief executive, Malcolm Webb, reflects widespread concern on exploration:

“Even if currently planned wells proceed, the rate of drilling is still too low to recover even a fraction of the estimated 6-9 billion barrels yet to be found. Britain’s waters contain an abundance of oil and gas yet to be found and it is critical we find the means to turn the current state of exploration around. Rig availability and access to capital are the two main barriers noted by our members.”

This is just one of the apparent contradictions in the UKCS today. There is record investment, a quarter of which is accounted for by just four large fields. The production outlook, boosted by the introduction of field tax allowances, looks encouraging, yet the survey finds fewer barrels in production, under development or being considered for investment than last year. Of the 10.7 billion boe currently in company plans, four billion boe of these have yet to secure investment and proven reserves have fallen sharply from 7.1 billion boe in 2013 to 6.6 billion boe in 2014. Unless the rate of maturing new developments increases, investment is expected to fall from £13 billion in 2014 to around £7 billion by 2016 to 2017."

[Hedgecutter]

I've said it before, I'll say it again: Rockall aside, there are no major new fields to find. Any decent structures to find were picked up and drilled in the 70's, 80's and 90's. The advancement of seismic technology since then allowed for new small fry fields which were of commercial value and previously bypassed... but nothing else.

Granted, small finds are there for the taking but you need to appreciate that companies don't have some sentimental value for the North Sea. If there are many other places with decent prospects, of which there are many, then companies will focus on them. I get the feeling that Xcite's Bently field has been misunderstood in many ways. Like Clair it's been sitting there for ages waiting on somebody to do something with it because the art of getting it out of the ground is so expensive. The idea that there are are several more billions of North Sea to be found is folly. The future is in increasing recoverables from the existing fields. If you can raise that by 10% then that's the equivalent of finding a whole bunch of new fields. Also holds much less risk as it's known for certain that the oil is there.

[chomp my root]

http://www.sundaypost.com/news-views/politics/tories-blocked-oil-boom-in-the-clyde-heseltine-admits-1.446273

A good read but as I said, we've been getting plenty oil out of other fields, if that changes then the MOD will be told to shift. The MOD is run by people who are used to getting their own way and throwing in the 'national security' bit gives them a bit of a get out clause but if it turns out they're sat on a gold mine then sooner or later it will get extracted. They're not the only ones who like to get their own way but even after a NO vote, if there's oil in them thar water's it will be sooked out and taxed. Just because it was 'blocked' in the past doesn't mean that will always be the case.

[doulikefish]

http://www.oilandgasuk.co.uk/news/news.cfm/newsid/933

No response to this yet.

"Tuesday 25 February 2014

Oil & Gas UK Activity Survey highlights Industry Paradox

Oil & Gas UK publishes its Activity Survey 2014 today (25 February), highlighting the contradictions currently at play in the UK offshore oil and gas sector. The industry trade body’s annual report on oil and gas exploration, production and investment activities forecasts capital expenditure of around £13 billion in 2014, the second highest year for investment on record with spending likely to remain above £10 billion next year, following a record £14.4 billion in 2013.

The report also points to better than expected production last year. New developments and an increased focus on production efficiency saw an average of 1.43 million barrels of oil equivalent per day (boepd) produced in 2013, eight per cent lower than in 2012 but a significant improvement on the average yearly decline of 15 per cent experienced between 2010 and 2012.

Production is expected to pick up further in 2014 and, with 25 new fields expected to come on-stream over the next two years, production is projected to rise gradually to around 1.7 million boepd by 2018. By then, however, 40 per cent of production will come from new field developments, underlining the continued importance of finding new reserves and bringing them into production.

In contrast, with exploration, the industry is facing its biggest challenge in 50 years. Only 15 exploration wells were drilled in 2013, according to figures from the Department of Energy & Climate Change (DECC), continuing a steep downward trend since 2008 when 44 exploration wells were drilled. Exploration over the past three years has been at its lowest in the history of the UK Continental Shelf (UKCS) and in 2013 replaced just 80 million barrels.

Oil & Gas UK chief executive, Malcolm Webb, reflects widespread concern on exploration:

“Even if currently planned wells proceed, the rate of drilling is still too low to recover even a fraction of the estimated 6-9 billion barrels yet to be found. Britain’s waters contain an abundance of oil and gas yet to be found and it is critical we find the means to turn the current state of exploration around. Rig availability and access to capital are the two main barriers noted by our members.”

This is just one of the apparent contradictions in the UKCS today. There is record investment, a quarter of which is accounted for by just four large fields. The production outlook, boosted by the introduction of field tax allowances, looks encouraging, yet the survey finds fewer barrels in production, under development or being considered for investment than last year. Of the 10.7 billion boe currently in company plans, four billion boe of these have yet to secure investment and proven reserves have fallen sharply from 7.1 billion boe in 2013 to 6.6 billion boe in 2014. Unless the rate of maturing new developments increases, investment is expected to fall from £13 billion in 2014 to around £7 billion by 2016 to 2017."

Ive highlighted the important bit,basically there aint enough drilling rigs around to fufill the exploration needs,you need a certain type for different depths