Iain Hutchison, Managing Director of world leading Drilling Engineering experts Merlin ERD, last month urged the Government to encourage oil companies to look “outside the box” and apply innovative solutions.
Last week the UK Government acted and, in his Budget Announcement, Chancellor George Osborne gave UK government support by halving North Sea tax obligations. Now it’s time for private industry oil companies to do their bit.
In the recent press article MD, Iain Hutchison stated that the industry has the key to unlock cost reductions, protect jobs and make North Sea oil more competitive. Drilling innovations successful overseas are dismissed as not appropriate for the UK, yet they are proven as close to home as Norwegian, Dutch and even German production areas of the North Sea.
The time for excuses is passed. There has been enough talking, it’s time for action. Failure is not an option. Our generation will be measured on results, do we really want to be the ones that risk losing most of the estimated 20 billion barrels of oil left in the North Sea?
Scottish Engineers have long punched above their weight on the world stage and assisted in delivering British Engineering as an international force of innovation, resourcefulness and resilience. Hutchison and his team are the latest to carry this mantle. Queen’s Award for Enterprise winners and holders of numerous drilling records, they specialise in making marginal oil fields economic through developing innovative solutions. “We’re being suffocated in the UK by people that want to tell us why things won’t work, even when analogous projects have already been delivered overseas. Where have the can do people gone?” asks Hutchison.
A confidential report on Advanced Drilling Techniques to the Scottish Government in October 2014, highlighted that these technologies could add 10 billion barrels of oil to UK reserves.
In turbulent times, the latest innovations and technologies can and should be deployed to produce oil from existing reservoirs that may have been deemed uneconomic under previous conditions. The opportunity exists to capitalise on untapped reserves adjacent to the current infrastructure and world leading innovators in Germany and Scandinavian countries have delivered world class extended reach and multi-lateral wells under the same North Sea conditions.
Extended reach drilling (ERD) and multi-lateral technologies are just two advanced drilling technologies (ADTs) that are part of the wider Enhanced Oil Recovery (EOR) agenda. Other technologies include managed pressure drilling, under-balanced drilling, through tubing rotary drilling and coiled tubing drilling. Despite being a technology leader in many areas, the UKCS has fallen significantly behind other regions in utilising key ADTs.
Merlin ERD designs and drills the longest wells in the world using innovative ERD technologies which have enabled operators to extract oil and gas from reservoirs up to 12km away in locations all over the world from Sakhalin to Wytch Farm. ERD and other ADTs offer a vital lifeline for the North Sea by reducing drilling costs, extending field life and increasing ultimate recovery of hydrocarbon reserves often without prohibitively expensive subsea equipment.”
Iain added: “If we lose the fantastic infrastructure that has been built it will be lost for a generation. The report made to Scottish Government estimated the value to the UK of exploiting difficult-to-reach oil could be $1.2 Trillion. If platforms become redundant and offline, a fortune in untapped fuel will be lost with billions of barrels of oil left in the ground.”
Recent job losses have been mounting and this creates further concern for the future skill base. Hutchison puts his money where his mouth is – the company have provided free places on their specialist training courses for unemployed drilling engineers and have recently recruited another world-leading engineer to their team.
Hutchison cites the need to “take timely action to ensure years of intense investment in the North Sea is not lost forever. British drilling engineering leads the world. More wells, cheaper & quicker is the priority to reduce costs. Deploying innovative British technology at home will make marginal hydrocarbon pools economic. Don’t tell me why it won’t work, ask me what it will take, then we’ll go and do it.