25 years of UK North Sea exploration · Rotliegendes sands. It took some time before the magnitude of this discovery became apparent, even to the Shell geologists who were involved,

25 years of UK North Sea exploration

J. M. B O W E N

Enterprise Oil pie, 5 Strand, London WC2N 5HU, UK

Any attempt to summarize 25 years of exploration for petroleum in the UK sector of the North Sea must be a daunting task. The outcome, in terms of the oil and gas fields discovered, is the subject of this volume. This introduction will attempt to outline, very briefly, some of the ups and downs of the exploration history which has led the industry to where it stands today, 25 years on (Fig. 1).

Fig. 1. UKCS drilling 25 year history�9

The background

When the author was at university in the early 1950s the very idea that the United Kingdom would be likely to become a significant, let alone major world producer of petroleum would have been viewed as utterly ridiculous.

It is true that oil and gas indications had been encountered in wells and mines in such disparate areas as Sussex, the west Midlands and the Midland Valley of Scotland and as seepages in Dorset, Lancashire and West Lothian, but these had been thoroughly investigated without the discovery of any economically significant oil or gas fields. Indeed, the only economic production at that time came from BP's small east Midlands fields based on Eakring where the first discovery had been made in 1939.

From Abbotts, I. L. (ed.), 1991, United Kingdom Oil and Gas Fields, 25 Years Commemorative Volume, Geological Society Memoir No. 14, pp. 1-7

The first serious attempt to explore for oil in the United King- dom was initiated in 1918 for strategic reasons, when 11 relatively shallow wells were drilled on anticlinal features in various parts of the country. Of these only one, Hardstoft-1 in Derbyshire, discovered producible oil, but attempts to follow up the discovery were unsuccessful.

Exploration then effectively ceased until the mid-1930s when the passing of the Petroleum Production Act in 1934 made it possible for oil companies to obtain licences from the Government to explore for and produce hydrocarbons. This, and possibly the imminence of war, prompted a renewed effort by the D'Arcy company, the forerunner of BP, which resulted in success at Formby in Lancashire and at Eakring in Nottinghamshire, in 1939. Both were oil discoveries following significant, but non-commercial, gas discoveries at Cousland near Edinburgh and Eskdale in Yorkshire in 1938.

D'Arcy continued its exploration throughout the war and post- war years and made a number of further discoveries, albeit on a very small scale and all in the east Midlands where the Millstone Grit of the Carboniferous forms the principal reservoir. None of these finds had recoverable reserves of more than a few million barrels.

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Fig. 2. Significant discoveries in Western Europe to 1958.

On the Continent there had been rather more success with the discovery during World War II of a number of oil and gas fields near the German/Netherlands border where the Schoonebeck field,

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2 J .M. BOWEN

discovered in 1943 had reserves of 385 MMBBL, and near Rotter- dam and The Hague where Shell had first found oil indications in a shallow exhibition well drilled in 1936. In the Bordeaux area of France, the Lacq field discovered in 1949 had oil reserves of 29 MMBBL and 7.5 TCF gas and in 1954 the Parentis discovery found reserves of 210 MMBBL. The Dutch fields produced gas from the Zechstein and oil and gas from the Lower Cretaceous Wealden, while in France the production was from the Upper Cretaceous and Upper Jurassic. Thus, until the late 1950s oil and gas fields of major commercial significance were rare in western Europe and non-existent in the United Kingdom (Fig. 2). Such small UK production as there was came from the Carboniferous Millstone Grit, while gas had been found in the Permian Zechstein.

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The Zechstein was also an exploration objective in the northern Netherlands and it was here, at Slochteren-1 in 1959, that a major gas discovery was made near the city of Groningen, not in the marine Zechstein carbonates but in the underlying terrestrial

Rotliegendes sands. It took some time before the magnitude of this discovery became apparent, even to the Shell geologists who were involved, but by the early 1960s following extensive appraisal the Groningen field was recognized as a world-ranking giant gas field. At last a field had been found that would clearly, even in those early days, have been profitable in an offshore environment such as the relatively shallow waters of the southern North Sea.

Exploitation of the continental shelves of the world outside the USA had had to await ratification of the Geneva Convention of 1958 which attempted to define national jurisdiction as far as the 200 m isobath. It required 22 countries to ratify the convention to give it the force of international law and it was not until 1964 that Britain, being the 22nd to ratify, actually set the ball rolling for the exploration of many continental shelves worldwide. In particular it triggered the start of exploration of the United Kingdom Continen- tal Shelf (UKCS).

The division of the North Sea was agreed between governments, mainly on the basis of median lines, i.e. the principle of equal distance from their respective coasts. The United Kingdom, Nor- way, the Netherlands and Denmark reached agreement upon their common boundaries between March 1965 and March 1966; all accepted the median line formula.

Following the implementation of The Continental Shelf Act of 15 April 1964 and the Petroleum (Production) (Continental Shelf and Territorial Sea) Regulations 1964, the government put on offer virtually the entire area between the Dover Strait and the northern tip of the Shetlands at 61 ~ North. Seismic surveys had been carried out in anticipation of this First Round and most of the blocks on offer in the southern area were allocated (up to 55~ while a fair number were allocated up to 58~ between 58 ~ and 61~ no blocks were licensed. At the time of the First Round, the North Sea median lines had not been agreed (this came a year later) and hence blocks adjacent to the median lines were excluded from the Round (Fig. 3).

The southern gas boom

Little time was lost in pursuing the Groningen Rotliegendes play into the southern part of the UK North Sea. However, the exploration proved to be difficult owing to the presence of the variable thick- nesses of mobile Zechstein salt, which also beneficially provided a very effective cap rock over most of the southern basin. This salt, however, also generally prevented the gas generated from the Carboniferous from reaching the excellent reservoirs and large structural closures at the Bunter Sandstone level. Disappointments were also caused by the absence of a salt seal in the south, the shaling out of the Rotliegendes reservoir to the north and areas of inversion with large attractive looking structures in which the expected favourable reservoir qualities had been destroyed by deep burial.

Nevertheless discoveries came thick and fast, starting with BP's West Sole and Conoco's South Viking in December 1965, and were quickly followed by Leman, Indefatigable (both Shell) and Hewett (Phillips) in 1966. Further discoveries followed in 1967 and 1968 and by the time this author arrived on the scene in early 1969, he was to be told 'Sorry, we have found all the gas in the south and we believe that there is little or no chance of finding hydrocarbons further north, (Fig. 4). Although only some 60% of the southern gas reserves, as currently known, had by then been defined, the remark reflected a negative attitude to further exploration then prevalent, not helped by the low gas prices then on offer from the monopoly buyer.

The Central Graben

1969, a peak year for exploration drilling in the south saw only desultory activity in what was then considered 'the north'. Most drilling was seen as fulfilment of licence obligations incurred in the



25 YEARS OF NORTH SEA EXPLORATION 3

first two rounds, nearing the end of their first terms, and no great optimism was displayed. However, many wells had oil or gas shows and to a few of us it seemed only a matter of time before a commercial discovery was made. In fact, as many as 14 wells had been drilled in the UK Central North Sea before the first modest UKCS discovery, the Montrose field, was made by Amoco in December 1969 (Fig. 4).

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Fig. 4. UKCS new field discoveries to end of 1969.

The Montrose discovery was made in sandstones of late Palaeo- cene age and this seemed to be the most likely play to pursue at the time; the fact that these sandstones had been deposited in deep water was not generally recognized for several years to come. In December 1969, Phillips made the first major North Sea oil discovery in the Chalk, then considered a most improbable reservoir, at Ekofisk in Norwegian waters. Although this added a second play it turned out to be restricted to the deepest parts of the Tertiary basin and barely extended into the UK sector.

The Montrose and Ekofisk discoveries together with earlier finds in Norway, such as Phillip's Cod and unannounced discoveries at 25/11-1 (Balder), and 2/11-1 (Valhall), had the effect of significantly increasing the industry's interest in the northern areas. The announ- cements of the Montrose and Ekofisk discoveries coincided with the 3rd UKCS licensing Round which closed on the 5 January 1970. It was a considerable success with 106 of the 157 blocks being awarded. Interestingly more than one third of the 67 blocks awarded in the northern North Sea went to three groups, having associations with these discoveries.

The size of Ekofisk was not immediately apparent due to its geological complexity, but the discovery made by BP in December 1970 on block 21/10 in massive Palaeocene sands in a huge four way dip closed structure was clearly a giant field and immediately focused the attention of the industry on the central and northern North Sea. In the following year Auk and Argyll found by Shell

and Hamilton added yet more diversity of objective in the form of the Zechstein and Rotliegendes, but these turned out to be small oil accumulations and the play has had little subsequent success.

The Third Round in 1969 had licensed several blocks north of 61~ and one of these, 211/29, became the site of what was then (1971) the world's most northerly offshore well, 300 km to the north of the nearest previous UKCS drilling. The well, drilled by Shell, discovered the Brent Field in Middle Jurassic deltaic sandstones, the second giant oil field after Forties in the UK sector; its discovery in June 1971 coincided with the announcement of the Fourth Round which, with 421 blocks, was the largest offering since the First Round. Coming on top of the major discoveries at Ekofisk and Forties (211/29-1 being a tight hole) the round created immense industry interest. In addition, for the first time, some blocks were available on a sealed cash bid basis. Less than 2 months were given for the industry to decide where to apply and how much to bid. The round was a resounding success, with 213 of the 421 discretionary blocks, and all 15 cash blocks awarded.

Applications were made by no less than 228 companies, approximately four times the number in any of the previous three rounds. Many newly formed independents were included. The government succeeded in awarding acreage to 213 of the 228 companies who applied, a clear reflection of the prospectivity of the blocks on offer and the diversity of play concepts perceived. The auction blocks brought in over s ranging from s for block 21/14 to the staggering amount of s 050 001 for one block in the far north, 211/21, paid by Shell/Esso. It is interesting to note in hindsight that commercial discoveries so far exist on only three of the 15 auction blocks, namely: 211/21 (Cormorant), 9/13 (Beryl) and 48/15 (Audrey). By the conclusion of the Fourth Round, it may be said that the northern North Sea was established as a major new oil province.

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4 J .M. BOWEN

The Jurassic plays

Although the Middle Jurassic Brent reservoir was unknown to most Fourth Round applicants, the round opened the way to the discovery of numerous Middle and Upper Jurassic reservoirs which, in oil equivalent terms, now constitute approximately 30% and 20% respectively of total original UK reserves (Fig. 5). Following the Forties discovery most companies applied in the 4th Round for blocks with structural closure at base Tertiary level and many Jurassic discoveries, including such fields as Ninian and Magnus, were drilled with basal Tertiary sands as the main objective. In fact the Tertiary in the far north proved to be relatively unprospective, with the exception of the Frigg gas discovery in Eocene deep water sandstones which straddles the UK-Norwegian boundary.

The Fourth Round led to a fresh burst of exploration activity between 1972 and 1977, aided and abetted by OPEC which quadru- pled crude oil prices in 1973 (Fig. 1). Suddenly, the possibility of economic development in water depths of 400-500 ft was realized, and this initiated what was to become one of the great technological achievements in oil exploration and production. After Brent, the Middle Jurassic deltaic sandstones also constituted reservoirs in such major northern fields as Ninian, Cormorant, Thistle, Dunlin, etc., while further south Beryl was also a major discovery. Unexpec- tedly, the Upper Jurassic also turned out to contain excellent clastic reservoirs mainly of deep water origin and gave rise to what is, perhaps, the most widespread UKCS play extending from Magnus in the north through Brae, Piper, Claymore and down to Fulmar in the south of the Central Graben. Most of these discoveries were made in the first 2-3 years of this period and by 1977 the rate at which reserves were discovered began to slacken. (Fig. 6)

Once again enthusiasm waned and the 'we have found everything worth finding' philosphy was widely supported. The introduction of Petroleum Revenue Tax (PRT) in 1975 significantly dampened exploration enthusiasm and led to the shelving of many develop- ments. Not until the next oil price hike of 1977 and again in 1979 did previously marginal fields again become economic. The appear- ance of a national oil company at about this time with rights to 51% of all new licences, did little to lighten the gloom. There followed a period of low exploration activity, despite relatively high oil prices, until the early 1980s when activity gradually started to pick up again.

The 1980s revival

Following the oil price rise to $37 a barrel in 1980/81, activity slowly started to pick up again. This was spurred on in some cases by visions of $60-80 oil by 1990 following the Iranian revolution, but also by the imminent (or actual) decline of some of the major fields then on production and also by the presence of infrastructure, such as pipelines with available capacity. For these and the reasons that follow, by 1984 exploration activity had outstripped the highest levels of the mid-1970s and, with the exception of one year (1987) of very low activity (due to the 1986 oil price collapse) has remained uniformly high ever since, despite relatively low oil prices in recent years. The potential for selling gas at significantly higher prices also revived activity in the southern gas area.

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Fig. 7. UKCS licensing rounds.

Once again there had been a revival of confidence in the UK North Sea, brought about by the dawning realization that oil and particularly gas could still be found at very low cost. Also as fields became liable to PRT the ability to offset exploration costs against




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6 J .M. BOWEN

PRT payments (made easier by 1983 tax changes) served to consoli- date the revival. It was concluded that exploration and production activity would continue many decades into the next century. The gloomy prophecies of the mid-1970s that the UKCS would be 'finished' by the end of this century were recognized to be mistaken.

The Seventh Round in 1980/81, no longer involving mandatory state participation, demonstrated the renewed interest in the UK North Sea; 204 companies made applications (almost as high as in the 4th Round when 228 companies applied). This is to be com- pared with the low level of interest in the previous two rounds (applications from 64 and 59 companies respectively) (see Fig. 7). Subsequent rounds of licensing at two yearly intervals have been highly competitive, albeit with a smaller number of companies involved. The diminishing supply of attractive acreage has caused the intensified competition and the last round (the 1 lth) in 1989 achieved the highest ever drilling commitment, which averaged 2.38 wells per block.

The renewed burst of activity has resulted in a large number of discoveries, mostly small, but some of medium size (Fig. 8). It has also resulted in the development of new plays and the resuscitation of several of the older ones.

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Fig. 10. UKCS historical success rate.

The accidental discovery of a major oil accumulation in Eocene sands at Alba, in 1984 while drilling to a deeper objective, revived on old play, initiated in 1971 with the Frigg gas discovery. This is still very much alive today, as exemplified by the subsequent discoveries at Forth and Gryphon. The Miller, Scott and Nelson

discoveries might also be described as 'sleepers', i.e. known plays which had lain fallow for some years. Large volumes of gas and condensate have also been proven in the deeper, high-pressure and previously less accessible Jurassic and Triassic horizons in the Central Graben, examples being Marnock, Erskine and Franklin.

In the southern basin, as well as increasing success in locating Rotliegendes gas reservoirs, explorers turned to the Westphalian with some success in areas where the Permian sands are thin or absent. The recent discovery of such fields as North Ravenspurn, Murdoch/Caister, Frobisher, Camelot and Davy to name but a few, indicates that plenty of life remains in an area which had been described as 'fully mature' as long ago as 1969.

Analysis of the distribution of discovered reserves clearly shows the dominance of the early rounds; some 90% of all known reserves having been found on acreage licensed in rounds 1 to 4. Currently held acreage awarded in these early licence rounds will continue to play a significant role in terms of future discoveries, particularly if the level of drilling activity in these licences is increased (Fig. 9).

Geological diversity

Perhaps the most striking aspect of North Sea exploration has been the diversity of exploration objectives. What started in the south as a Permian gas play and, in the early years in the north as a Palaeocene oil play, has resulted in hydrocarbon discoveries in rocks ranging from Devonian to Eocene in age and from desert through deltaic to deep marine in environment. Carbonate reservoirs, apart from the unusual Chalk of the Ekofisk area and rare karstified Zechstein, are however lacking, the province being domi- nated by clastic rocks.

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In constrast to the reservoirs, there is little diversity of source rocks without which the whole North Sea phenomenon would not have happened. It is now generally accepted that the vast majority, if not all the hydrocarbons in the central and northern North Sea are derived from the widespread and richly organic Kimmeridge shales while in the southern areas Westphalian coals were the source for gas.

Given the diversity of reservoirs and abundance of source rock it is likely that further plays will still be developed whether by accident or design. As far as existing plays are concerned some, notably the Middle Jurassic of the Shetland Embayment, seem to have been quickly exhausted, while others such as the Palaeogene and Upper Jurassic in the north and the Permian and Carbon- iferous in the south continue to yield important discoveries (Fig. 5).

In general, however, success ratios have levelled off showing little sign of the decline which would result in the curtailment of the high level of exploration effort still evident today (Fig. 10).

The result of 25 years of exploration in the UKCS has produced a multitude of benefits for the UK, its government and industry but above all for geologists and geophysicists, for whom this volume has been produced, it has brought involvement in one of the world's most exciting and interesting petroleum provinces; excitement and interest which, I believe will continue for many decades to come (Figs 11 & 12).

The author wishes to express his thanks in particular to K. East who researched and prepared most of the statistical data presented in this paper and also to B. Evamy for his helpful comments and review of the text.

Fig. 12. UKCS oil and gas fields and discoveries 1965 to end of 1989.



Documents

25 years of UK North Sea exploration · Rotliegendes sands. It took some time before the magnitude of this discovery became apparent, even to the Shell geologists who were involved,