These conditions paired with the remoteness of the area have also meant that the region is relatively unexplored, despite its potential for the oil and gas sector. According to BP’s estimations currently there is at least 640mn bl of oil in recoverable resources.
GlobalData upstream oil and gas analyst Daniel Rogers says: “The WoS basin in comparison to the North Sea basins has been relatively under-explored. The extreme water depths, challenging subsurface, and lack of knowledge and experience in the basin lead to higher risk than the North Sea exploration. That being said, there is currently vast acreage open to explorers and yet-to-find volumes are significant.”
Drilling in the area particularly peaked after the Geological Society published a study positioning the WoS area as the largest remaining exploration site with potential for significant new finds, by virtue of its relative exploration immaturity.
Although the Department of Energy and Climate Change (DECC) considered the Central North Sea as the largest yet-to-find potential on the UK Continental Shelf, new research from Global Data found that for the last four years BP and Shell’s oil and gas production in the WoS has risen and it will overtake North Sea as future-major producing basin in UK.
The report showed that North Sea explorations were of lower interest to BP and Shell, the UK’s biggest oil and gas producers, compared to their activity in the WoS.
Furthermore, of the successful 30th UK Offshore Licensing Round in 2017, approximately 75% of the licensed WoS blocks involved European major participation. European majors have stakes in 80% of the planned and announced projects in the area compared to approximately 40% in the North Sea.
Overall, the report concludes that the WoS area retains the attention of major Exploration and Production operators in the region; however its infrastructure difficulties can impede the future growth potential in the basin.
Rogers concludes: “There remains significant value to be captured within the North Sea particularly through near field exploration and marginal field developments, however, the West of Shetlands remains more attractive for operators willing to take higher exploration risks necessary to discover fields large enough to compete for capital within highly competitive global portfolios.”