Remaining potential and opportunities on the United Kingdom Continental Shelf (UKCS) and the need for New Entrants Jim Munns DTI Manager Promote UKCS Houston Geological Society December 2001 London PESGB January 2002 Aberdeen PESGB March 2002 Houston Geological Society December 2001 London PESGB January 2002 Aberdeen PESGB March 2002 British Geological Survey

Why the UKCS? 27 BBOE Yet to Find 2001 BUZZARD largest UKCS discovery since 1993 Deep water Atlantic Margin under-explored Subtle traps and non-conventional plays in the North Sea 35% E&A well success rate 27 BBOE Yet to Find 2001 BUZZARD largest UKCS discovery since 1993 Deep water Atlantic Margin under-explored Subtle traps and non-conventional plays in the North Sea 35% E&A well success rate

Why the need for new companies? To meet government/industry aspirations (PILOT) E&A activity has been low for the last three years Loss of active exploration companies due to mergers (funding) Not replacing production Maximise ultimate recoverable reserves To meet government/industry aspirations (PILOT) E&A activity has been low for the last three years Loss of active exploration companies due to mergers (funding) Not replacing production Maximise ultimate recoverable reserves

Main basins UKCS Main basins UKCS

Stratigraphy

‘PILOT’ Joint Industry Government initiative - Vision for 2010 Production at 3 million boe/dayProduction at 3 million boe/day Investment of £3 billion/yrInvestment of £3 billion/yr 100,000 more jobs than would otherwise have been100,000 more jobs than would otherwise have been Prolonged self sufficiencyProlonged self sufficiency Production at 3 million boe/dayProduction at 3 million boe/day Investment of £3 billion/yrInvestment of £3 billion/yr 100,000 more jobs than would otherwise have been100,000 more jobs than would otherwise have been Prolonged self sufficiencyProlonged self sufficiency

Projected UKCS production from discovered reserves (mmboe)

Gas Oil Production from already discovered fields Oil Equivalent (mmboe/day) Gas - Possible Oil - Possible Gas - 2P Oil - 2P Already produced Future production

UKCS Offshore oil production by reserve ranking * Million barrels a day Number of producing fields Other offshore approved oilfields Top 10 largest approved oilfields Number of fields.

Opportunities for Independents? Mix of frontier and mature basins 35% E&A Success rate Recent fall-off in E&A activity Well developed infrastructure Portfolio of opportunities includes exploration, undeveloped discoveries, and “breathing life” into mature fields Mix of frontier and mature basins 35% E&A Success rate Recent fall-off in E&A activity Well developed infrastructure Portfolio of opportunities includes exploration, undeveloped discoveries, and “breathing life” into mature fields

Exploration wells vs. oil price

Average discovery field size

Some specific discoveries....

Infrastructure

Future Potential (maximum case)

UK Undiscovered Reserves – Maximum Case Yet to find Maximum case: 27.2 BBOE

Future Potential (minimum case)

UK Undiscovered Reserves – Minimum case Yet to Find Minimum Case : 3.9 BBOE

Source Rock Distribution Jurassic mudstones Jurassic mudstones – uncertain distribution Carboniferous coal measures Carboniferous basinal mudstones ? Regional cross- section

Focus of future activity Atlantic Margin Play Ur.Jurassic/Lower Cretaceous stratigraphic play Mesozoic basin margin play Deep basin axis play Lower Permian pinchout play Palaeogeomorphic play Atlantic Margin Play Ur.Jurassic/Lower Cretaceous stratigraphic play Mesozoic basin margin play Deep basin axis play Lower Permian pinchout play Palaeogeomorphic play

Atlantic Margin

Atlantic Margin Play

3.5 NWSE 2.0 TWT (secs) Sea bed Opal Transition Eocene to Oligocene Eocene basin-floor fan Top Caledonia Fan Eocene 213/10 prospect 1 km Mid-Eocene basin-floor fan sandstone target Seismic line courtesy of Fugro-Geoteam AS

Central North Sea

Upper Jurassic stratigraphic play

T W T ( s e c s ) 1 km Prospect 12/23 NNWSSE 1 km Amplitude anomaly Top Jurassic Top Triassic Instantaneous amplitude section: prospect 12/23. Updip pinchout of Ur Jurassic basin-floor sandstones Seismic line courtesy of Fugro-Geoteam AS

Mesozoic basin margin play

SWNE 20/8-2 oil discovery 20/8-2 20/9-220/9-1 1 km T W T ( s e c s ) Eocene Paleocene U. Cretaceous L. Cretaceous Devonian and older Permo- Triassic Jurassic H Mesozoic basin margin play Updip pinchout of U Jurassic basin-floor sandstones

Deep basin (HPHT) play North Sea Oil Province: all fields North Sea Oil Province: HPHT fields HPHT play area

Paleocene 3 secs 4 secs 5 secs Eocene & younger Base Jurassic Intra-Triassic Top L Permian Cretaceous Deep basin (HPHT) play 'Seismic data sample supplied courtesy of Veritas DGC Limited' 6km offset 2D Seismic Data data Acquired Q4 2000

Southern Gas Basin Carboniferous and older

Lower Permian aeolian margin play

Palaeogeomorphic play Atlantic Margin & North Sea Oil Province

Heavy Oil on the UKCS Developed Fields and Fields Under Development MMB stooip Significant Discoveries – 1859 MMB stooip Other Discoveries – 1885 MMB stooip Prospects MMB stooip Total 8812 MMB STOIIP

Strategic Environmental Assessment Strategic Environmental Assessment Future Programme

Summary – why the UKCS? 27 BBOE Yet to Find 2001 BUZZARD largest UKCS discovery since 1993 Deep water Atlantic Margin under-explored Subtle traps and non-conventional plays in the North Sea 35% E&A well success rate 27 BBOE Yet to Find 2001 BUZZARD largest UKCS discovery since 1993 Deep water Atlantic Margin under-explored Subtle traps and non-conventional plays in the North Sea 35% E&A well success rate

Conclusions Full spectrum of opportunities remain Need to make the UK a better place to do business – stable, responsive, transparent, competitive Want to get licenses in hands of those who are ‘hungry and innovative’ – Brian Wilson (UK Energy Minister)

Why the UKCS? Acknowledgements Sue Stoker and Don Cameron of the BGS for the mapping Fugro-Geoteam,Veritas for providing seismic data IHS Energy, Wood MacKenzie and Actis Geoscience for providing graphical data Colleagues at the DTI for their review of the data and presentation material Acknowledgements Sue Stoker and Don Cameron of the BGS for the mapping Fugro-Geoteam,Veritas for providing seismic data IHS Energy, Wood MacKenzie and Actis Geoscience for providing graphical data Colleagues at the DTI for their review of the data and presentation material