1. 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

2. 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

3. 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

4. Main basins UKCS Main basins UKCS

5. Stratigraphy

6. ‘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

7. Projected UKCS production from discovered reserves (mmboe)

8. Gas Oil Production from already discovered fields 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 196719701973197619791982198519881991199419972000200320062009201220152018 Oil Equivalent (mmboe/day) Gas - Possible Oil - Possible Gas - 2P Oil - 2P Already produced Future production

9. UKCS Offshore oil production by reserve ranking 2 7 8 12 14 15 18 20 25 27 30 32 36 38 46 50 48 56 70 76 81 99 113 124 133 135 0.0 0.5 1.0 1.5 2.0 2.5 3.0 1975197719791981198319851987198919911993199519971999* Million barrels a day 0 20 40 60 80 100 120 140 160 Number of producing fields Other offshore approved oilfields Top 10 largest approved oilfields Number of fields.

10. 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

11. Exploration wells vs. oil price

12. Average discovery field size

13. Some specific discoveries....

14. Infrastructure

15. Future Potential (maximum case)

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

17. Future Potential (minimum case)

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

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

21. 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

22. Atlantic Margin

23. Atlantic Margin Play

24. 3.5 NWSE 2.0 TWT (secs) 2.5 3.0 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

25. Central North Sea

26. Upper Jurassic stratigraphic play

27. 2.0 1.0 1.5 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

28. Mesozoic basin margin play

29. SWNE 20/8-2 oil discovery 20/8-2 20/9-220/9-1 1 km 1.5 0.5 T W T ( s e c s ) 2.0 2.5 3.0 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

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

31. 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

32. Southern Gas Basin Carboniferous and older

33. Lower Permian aeolian margin play

34. Palaeogeomorphic play Atlantic Margin & North Sea Oil Province

35. Heavy Oil on the UKCS Developed Fields and Fields Under Development - 3068 MMB stooip Significant Discoveries – 1859 MMB stooip Other Discoveries – 1885 MMB stooip Prospects - 2000 MMB stooip Total 8812 MMB STOIIP

36. Strategic Environmental Assessment Strategic Environmental Assessment Future Programme 7 8 6 5 4 3 2 2 1

37. 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

38. 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)

39. 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