- Title : Drilling Engineering by University Heriot-Watt
- Publish : Institute of Petroleum Engineering, Heriot-Watt University
- Type Document : pdf
- Release : N/A
- Total Page : 539 Page
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Decrypted Contents
INTRODUCTION
Exploration and Production Licences :
In the United Kingdom, the secretary of State for Energy is empowered, on behalf of the Government, to invite companies to apply for exploration and productio licences on the United Kingdom Continental Shelf (UKCS). Exploration licences may be awarded at any time but Production licences are awarded at specific discrete intervals known as licencing ‘Rounds’. Exploration licences do not allow a company to drill any deeper than 350 metres (1148ft.) and are used primarily to enable a company to acquire seismic data from a given area, since a well drilled to 1148 ft on the UKCS would not yield a great deal of information about potential reservoirs.
Production licences allow the licencee to drill for, develop and produce hydrocarbons from whatever depth is necessary. The cost of fi eld development in the North Sea are so great that major oil companies have formed partnerships, known as joint ventures , to share these exploration and development costs (e.g. Shell/Esso).
In the United Kingdom, the secretary of State for Energy is empowered, on behalf of the Government, to invite companies to apply for exploration and productio licences on the United Kingdom Continental Shelf (UKCS). Exploration licences may be awarded at any time but Production licences are awarded at specific discrete intervals known as licencing ‘Rounds’. Exploration licences do not allow a company to drill any deeper than 350 metres (1148ft.) and are used primarily to enable a company to acquire seismic data from a given area, since a well drilled to 1148 ft on the UKCS would not yield a great deal of information about potential reservoirs.
Production licences allow the licencee to drill for, develop and produce hydrocarbons from whatever depth is necessary. The cost of fi eld development in the North Sea are so great that major oil companies have formed partnerships, known as joint ventures , to share these exploration and development costs (e.g. Shell/Esso).
Exploration, Development and Abandonment:
Before drilling an exploration well an oil company will have to obtain a production licence. Prior to applying for a production licence however the exploration geologists will conduct a ‘scouting’ exercise in which they will analyse any seismic data they have acquired, analyse the regional geology of the area and fi nally take into account any available information on nearby producing fi elds or well tests performed in the vicinity of the prospect they are considering. The explorationists in the company will also consider the exploration and development costs, the oil price and tax regimes in order to establish whether, if a discovery were made, it would be worth developing.
If the prospect is considered worth exploring further the company will try to acquire a production licence and continue exploring the fi eld. This licence will allow the company to drill exploration wells in the area of interest. It will in fact commit the company to drill one or more wells in the area. The licence may be acquired by an oil company directly from the government, during the licence rounds are announced, or at any other time by farming-into an existing licence. A farm-in involves the company taking over all or part of a licence either: by paying a sum of money to the licencee; by drilling the committed wells on behalf of the licencee, at its own expense; or by acquiring the company who owns the licence. Before the exploration wells are drilled the licencee may shoot extra seismic lines, in a closer grid pattern than it had done previously. This will provide more detailed information about the prospect and will assist in the defi nition of an optimum drilling target. Despite improvements in seismic techniques the only way of confirming the presence of hydrocarbons is to drill an exploration well. Drilling is very expensive, and if hydrocarbons are not found there is no return on the investment, although valuable geological information may be obtained. With only limited information available a large risk is involved. Having decided to go ahead and drill an exploration well proposal is prepared.
Before drilling an exploration well an oil company will have to obtain a production licence. Prior to applying for a production licence however the exploration geologists will conduct a ‘scouting’ exercise in which they will analyse any seismic data they have acquired, analyse the regional geology of the area and fi nally take into account any available information on nearby producing fi elds or well tests performed in the vicinity of the prospect they are considering. The explorationists in the company will also consider the exploration and development costs, the oil price and tax regimes in order to establish whether, if a discovery were made, it would be worth developing.
If the prospect is considered worth exploring further the company will try to acquire a production licence and continue exploring the fi eld. This licence will allow the company to drill exploration wells in the area of interest. It will in fact commit the company to drill one or more wells in the area. The licence may be acquired by an oil company directly from the government, during the licence rounds are announced, or at any other time by farming-into an existing licence. A farm-in involves the company taking over all or part of a licence either: by paying a sum of money to the licencee; by drilling the committed wells on behalf of the licencee, at its own expense; or by acquiring the company who owns the licence. Before the exploration wells are drilled the licencee may shoot extra seismic lines, in a closer grid pattern than it had done previously. This will provide more detailed information about the prospect and will assist in the defi nition of an optimum drilling target. Despite improvements in seismic techniques the only way of confirming the presence of hydrocarbons is to drill an exploration well. Drilling is very expensive, and if hydrocarbons are not found there is no return on the investment, although valuable geological information may be obtained. With only limited information available a large risk is involved. Having decided to go ahead and drill an exploration well proposal is prepared.
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