Our founder, Francis Cram, has recently hosted a webinar called ‘Mapping The Changing Landscape of the North Sea’ and in this article, we are going to cover the main points that were discussed during our Lunch & Learn on March 3, 2021.
Let’s start by introducing our founder Francis first. Francis has a background in the Oil and Gas industry. He has worked in the North Sea for most of his career - mainly in exploration, with his more recent work revolving around mapping online information and technology. Francis and his team launched MapStand around 2 years ago and retrieved most of the information and data presented in this article with the use of MapStand technology.
MapStand provides companies with global spatial data sets, geotagged news and analytical tools to help them understand upstream oil and gas, energy infrastructure, energy transition and renewable energy. The MapStand offering is two folds:
- The MapStand platform, which is available for free here.
- The MapStand HUB, which is a custom web mapping & analytics platform. Demo available here.
The above image is an example of the oil and gas infrastructure in the central part of the North Sea, retrieved from MapStand, highlighting pipelines, fields and licences.
MapStand also provides commercial licenses to their datasets and builds companies specific portals and integrations.
What is a Super basin?
What is a Super basin? A Super basin is a phrase that has become popular in recent years to describe some of the most prolific basins around the world. The North Sea is most definitely considered a Super basin by all of the measures that people have used to describe this term. Commonly used, this basin has produced over 5 billion barrels of oil. But the Super basins also need to have more than 5 billion recoverable remaining reserves, two or more petroleum systems and source rocks. They will also have multiple stacked reservoirs to enable the large accumulations that you would see in Super basins.
Access to the market is also very important. The North Sea, as you can see on the map above from the MapStand platform database, is very close to the markets of Norway, Europe and the United Kingdom.
The North Sea is technically a series of super basins. There are the Viking graben, the Moray Firth Central Garden and the Anglo-Dutch basins, all of which fulfil the above requirements.
Why Super basins are important
What is going to happen to those remaining 5 billion barrels and what role energy transition will play in the next chapter of the Super Basins and how will the industry adapt to comply with things like the net-zero carbon obligations?
Net Zero, of course, is something that will include changes in the whole of the economy, including everything from household heating to the transport industry, but the North Sea and the production of Hydrocarbons is an enormous contributor. This is due to both the way in which the industry extracts Hydrocarbons, as well as how the end products are used. Given all of the above, we are going to see an enormous change to the way that the industry operates and an evolution in the use of the continental shelves across the North Sea.
It may only be Super basins that survive energy transition as the remaining centers of the hydrocarbon industry.
What is happening in the North Sea right now
The right-hand side of the image above shows a graph of the exploration drilling trends across the UK, Norway, Netherlands, and Denmark.
We can notice that there was a lot of exploration and drilling, up to 250 wells a year, throughout the 80s and early 90s. But these have very steadily dropped off, and we now see little exploration drilling occurring in Denmark, UK and the Netherlands.
On the lower right-hand side of the graph, we can see the creaming curve analysis. This is a graph that shows the number of exploration wells drilled and the resources discovered by these wells. They are essentially a measure of the success of exploration drilling. Where the graph is very steep and rises quickly, this is due to large discoveries being found by exploration wells.
The series of jumps in the graph represent some of the largest fields discovered within the basin. The graph includes onshore areas in the Netherlands and the UK. So the first huge jump in 1959 is the discovery of the giant Groningen field in the Netherlands, a gas field that has underpinned European gas production since the 60s.
We also see fields like the Troll field and Ekofisk and Brent, creating big jumps. But in reality, since the year 2000, we have seen an almost flat trajectory, apart from some - one in particular, large discovery, the Johan Sverdrup field in Norway. The basin that is now incredibly mature. This means that we are really at the end of the phase where you are finding significant discoveries despite quite large prospective resources being described by the governments.
Norway seems to be the only country that is still marching forward with sustained exploration drilling, partially due to increased state support. But aside from that, why are states such as Norway, happy to continue?
Note the table showing the reported, proven and probable 2P reserves reported by the governments around the North Sea. The numbers for the UK, Norway, Netherlands, and Denmark are in billions of barrels. This is still a hugely prolific basin and will be producing for many years. But we also see, in terms of prospective resources, that the UK Government predicts just over, 4 billion barrels of oil and gas still to be found within UK waters and the Norwegian regulator nearly 24 billion barrels of oil equivalent, with less in the Netherlands and Denmark. This tells us that there is still an enormous prize to be won. However, there are a lot of new considerations we all need to think about when trying to understand what the future will bring.
In the image above, you can see production. Peak oil production occured around the year 2000, with gas peak production occurring a little bit later around 2010. On the gas production graphs, there has been a huge drop in recent years partly caused by the Groningen field prematurely ceasing production, mainly due to production induced seismicity causing earthquakes.
So far, across the North Sea, 17% of the fields have ceased production with a further 3.5% shut-in. What we can see now is that the whole basin is entering a phase of decommissioning. According to the OGA, the decommissioning costs (as fields progressively cease production) will be about 48 billion, of which 15 billion will already be spent within the next five years. This is an enormous change in the activity and also coincides with the enormous and accelerated growth of offshore renewables.
The above image comes from the MapStand HUB showing an analysis dashboard of Wind Farms in the Southern part of the North Sea basin.
According to the EU, to reach all the net-zero commitments, the windfarm capacity will need to go from 23 GW today up to 450 GW. That is an enormous increase from where we are today, with half of that capacity expected to be installed within the North Sea. We are already seeing large scale grid-connected Wind Farms as highlighted on the map above, with the UK and Germany leading in terms of installed capacity. We are also seeing some new exciting projects for Floating Wind, such as the Hywind Tampen project, where Floating Wind will be used to power both the Snorre and Gullfaks platforms. These will be the world's first oil platforms powered by renewable energy. This shows one of the key trends that we are going to see coming in this basin. It will be the electrification and the reduction of co2 emissions from production.
What a Super basin will look like in 2030
The MapStand Energy Transition database as seen in the map above highlights a whole series of different energy projects and programmes designed to move us towards a low carbon future. It shows 162 Wind Farms which are built or being built and 264 planned in the offshore area - shown in the very light grey squares that surround the Continental coasts. In terms of the wind farms, we can see through the orange, green and yellow polygons in the offshore area the wind farms that have been built or are being built. The light orange polygons are the planned wind areas which we can see in large areas in offshore Germany, Denmark.
There are also green dots on the map which represent areas where there is planned hydrogen production. The map shows a whole series of industrial clusters as well as offshore projects that are being scouted out for the production of Hydrogen.
There also is a hydrogen pipeline coming down to the Grangemouth area - an industrial cluster. On the background of the map, we can see the green and red colours. These are CO2 emissions from the European EDGAR programme, and they highlight some of the key industrial clusters.