North Sea Well Intervention Market on the Rise Despite Low Oil Price: Report Offshore Network

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BusinessOffshore Network intervention projects will continue to grow over the next five years and industry decision makers from Total, BG Group, Tullow Oil and Wintershall will address their future plans at OWI 2015 Conference: http://bit.ly/OWI_Brochure

Offshore network report that the offshore well intervention market is set to continue its rapid growth despite the current low oil prices. Market analysts Douglas Westwood announced that they expect subsea well intervention activity to continue to flourish in the next five years, stating that “despite the recent plunge in oil price, DW expects the global subsea wellstock to increase over the period by 41% – driven by an increase in ultra-deepwater (&1,000m) activities. Maturing subsea wells, of which 77% are over five years old, will increase demand for workover units in Latin America, North America and Western Europe". (Subsea Well Intervention Vessels as Rig Alternatives, Monday 22nd December 2014: http://www.douglas-westwood.com/dwmonday)

In conjunction with the subsea market multiple P&A campaigns are required across the Central North Sea, continuous well integrity projects need to be executed on aging assets and greater production optimisation needs must be met following Sir Ian Wood’s report. Due to this well intervention programmes remain a top fiscal and operational priority for North Sea operators.

North Sea Statistics:

Following the Wood review, it is evident that wellbore intervention can significantly aid the MER (Maximising Economic Recovery) strategy for the UKCS, showing that in certain cases well intervention can contribute greater returns than drilling campaigns. This has resulted in a huge global increase in intervention services, from $9.97bn in 2013 to an expected $17.48bn by 2018 – with North Sea market demand playing a big part in this growth.

Moreover the relatively poor performance of subsea wells in comparison to dry trees has been actively tackled by some operators and regulators. For example Statoil’s focus is to increase recovery from all subsea fields to 55% OOIP, an increase corresponding to 200MSm3 additional oil. (Source, Statoil OTC 18746: https://www.onepetro.org/conference-paper/OTC-18746-MS)

In conjunction with the need to improve recovery, there is a huge demand for integrity and P&A. The expected expenditure for North Sea P&A is currently £4.5bn. This represents almost half (43%) of the total decommissioning expenditure between 2013- 2022, as over 800 wells need to be abandoned in this time.

Although there is a huge demand for intervention services, there is unfortunately a significant lack of suppliers and service providers. Currently only 37% of P&A demand can be met with current capability, showing a need for new contractors and technology.

The compiling effects of the above drivers, met with the need for more suppliers to deliver efficiency, has created a buoyant intervention market which can ensure the stability and continued growth of compliant North Sea operations, whilst encouraging growth for service companies.

2nd Annual Offshore Well Intervention Conference, Aberdeen April 15-16:

In 2014 the Offshore Well Intervention Conference brought over 240 North Sea decision makers together to successfully develop a best practice plan that mitigates intervention risk. Building on this foundation, OWI 2015 will assemble over 300 of the region’s most influential intervention experts to tackle key knowledge and technology gaps associated with mature field well intervention. This includes a focus on marginal intervention, P&A and LWI to ensure you have the latest information that can increase the value of your wellstock whilst driving key efficiencies.

For more information you can download the conference brochure here: http://bit.ly/OWI_Brochure

Tommy Angell
Director | Offshore Network Ltd.
t: +44 (0) 203 411 9184 | e: tangell(at)offsnet(dot)com

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Tommy Angell

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