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A trip back in time: How people talked about the North Sea oil & gas industry 40 years ago

WHERE IT ALL STARTED:

Commercial extraction of oil on the shores of the North Sea dates back to 1851, when James Young retorted oil from torbanite (boghead coal, or oil shale) mined in the Midland Valley of Scotland. Fast forward to 1964 and the history of the North Sea, as we know it today, began…

1964 – UKCS Act

The UK Continental Shelf Act came into force in May 1964. Seismic exploration and the first well followed later that year. This, together with a second well on the Mid North Sea High were dry, as the Rotliegendes was absent, but BP’s Sea Gem rig struck gas in the West Sole Field in September 1965.

1965 – First gas: BP’s Sea Gem rig strikes gas in the West Sole field in 1965

The field – around 70km off the coast of Yorkshire – was the first to be developed in the North Sea. West Sole produced its first gas in 1967.

1967 – First gas arrived on shore at the Easington terminal

On 6th March 1967, the first North Sea natural gas from the West Sole Field was brought ashore at the Easington gas terminal in Yorkshire.

1967 also marked the start of a ten-year government programme to convert every gas appliance in the UK to use natural gas instead of ‘town gas’ (a form of flammable gas derived from coal).

BOOM TIME:

1973 – The oil crisis made offshore more appealing

Caused by an embargo installed by the Organisation of Arab Petroleum Exporting Countries (OAPEC) as a result of the United States support for Israel, the inevitable impact of the oil crisis of 1973 was a quadrupling of prices. As a result of this, offshore production became a more attractive prospect and production soon started from large new oil fields such as the Argyll and Duncan, the Forties, Brent, Frigg and Piper.

1985 – Peak monthly production

In January, the monthly rate of North Sea oil production achieved its highest level of 84.9 million barrels.

1999 – Peak annual production

Fast forward 14 years, 1999 saw the North Sea’s highest annual output, with 398 million barrels being produced.

GIANTS:

Greatest discoveries in the UKCS North Sea:

1969 – Amoco discovered the Montrose field.

1970 – The Forties Oil field, the largest oil field in the UK sector of the North Sea, 110 miles east of Aberdeen, was discovered in 1970 and first produced oil in 1975 under ownership of BP.

Queen Elizabeth II presses a button in the control room at Dyce, near Aberdeen, to launch the flow of oil from the Forties Field to BP’s Grangemouth refinery 237 miles away, 1975. (Photo: BP via the Guardian.com)

 

1971 – When the Brent field was discovered by Shell in 1971, it was one of the most significant oil and gas finds made in the UK sector of the North Sea. Another significant discovery of 1971 was Frigg, in the Norwegian Block, by French oil company Elf Aquitaine, which merged and changed name to Total S.A.

1973 – Occidental Petroleum Corp., Getty Oil (Britain) Ltd., Thomson North Sea Ltd., and Allied Chemical (North Sea) Ltd., that later transformed into the OPCAL joint venture, obtained an oil exploration licence in 1972 and discovered the Piper oilfield in early 1973 after seismically mapping the area.

Tragically, the Piper Alpha suffered an explosion disaster in July 1988, resulting in the deaths of 167 people. This was a watershed moment for the industry which led to fundamental reforms to North Sea safety procedures.

1976 – The inner Moray Firth Beatrice field, a Jurassic sandstone/shale reservoir 1829m deep in a ‘fault-bounded anticlinal trap’, was discovered in 1976.

1978 – Gullfaks was discovered in 1978, and the plan for development and operation (PDO) for Gullfaks Phase I was approved in 1981. A PDO for Gullfaks Phase II was approved in 1985. Production started in 1986.

1979 – The Oseberg oil field and Troll gas field were discovered on the Norwegian Continental Shelf. Troll, containing about 40 per cent of total gas reserves on the Norwegian continental shelf (NCS), represents the cornerstone of Norway’s offshore gas production.

1984 – The Smorbukk field was discovered approximately 230km west of the Norwegian mainland where the water depth is 250 to 300m. Later, in 2013 Statoil (now Equinor) and partners approved development of the Smorbukk South Extension in the Asgard unit.

2001 – Buzzard was the UK’s largest discovery in the past 25 years and expected to produce 180,300 barrels per day. Found in June 2001, Buzzard had producible reserves of almost 64×106 m³ (400m bbl) and an average output of 28,600m³ to 30,200m³ (180,000-220,000 bbl) per day.

2017 – Chrysaor become largest independent operator in North Sea.

MY ACCOUNT – DERRICK HESKINS:

Derrick Heskins, Sales Manager at Claxton, is one of our oilfield veterans, with over 40 years of experience in the industry. He started his career in the industry on his 21st birthday.

Two of Derrick’s sons now work in the oil and gas sector and are currently with Claxton. Daniel Heskins has recently been working on a decommissioning campaign on the same platform that his father ran subsea templates, mudline suspension systems and performed tie backs on back in the 1980s.

Reflecting on his early career, Derrick said

“I worked on the Shell Brent project circa 1978, initially manufacturing wellheads and Xmas trees onshore, before progressing offshore into the Brent field where I ran completions and performed wellhead maintenance operations. From there, I went on to have a colourful career that has taken me around the world to 63 countries and counting!”

LIFE IN THE OLD DOG:

The North Sea clearly has a profitable and prosperous past, but what does the future look like?

The British and Norwegian sectors hold most of the remainder of the large oil reserves. It is estimated that the Norwegian sector alone contains 54% of the sea’s oil reserves and 45% of its gas reserves. More than half the North Sea oil reserves have been extracted according to official sources in both Norway and the UK.

However, there is still plenty more value to be eked out of the maturing basin, according to one of the region’s most experienced operators. In 2018, Serica Energy became a leading UK mid-tier oil and gas company following the acquisition of BP, Total E&P, BHP and Marubeni’s interests in the Bruce and Keith assets and BP’s interest in the Rhum asset in the UK Northern North Sea. Serica’s main focus is on production and development in the UK North Sea. This diverse, balanced portfolio puts the company in an excellent position for future growth, with revenue from our producing assets and the ability to move on other interests when opportunities arise.

Decommissioning has become an integral part of the offshore industry over recent years as operators seek to reduce their asset stock and remain profitable at the same time. More than 100 platforms are forecast to be completely or partially removed over the next decade in the waters of the United Kingdom Continental Shelf (UKCS) alone. The industry will spend some £15bn (UKCS), and globally $80bn over the next decade, instilling the realisation that decommissioning companies in the UK will be well placed to gain a share of this market. As the focus for operators in the North Sea turns to decommissioning, we looked at the future of the industry in a previous Claxton blog.

With the ever-increasing pressure to save money, it’s important that oil companies have a reliable and expert supply chain to rely on for guidance and support. The supply chain and service companies, Claxton included, have had to diversify to meet the needs of the ever-evolving North Sea industry. Twenty-five years ago, the focus was on providing equipment and services to support drilling campaigns, whereas today, there is much emphasis on providing solutions to extend the life of assets and inevitably, decommissioning them in the most efficient way possible.

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