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NSTA says 900 million new North Sea barrels could be sanctioned by next year

© Supplied by OGANorth sea
Andy Samuel

The annual performance review for the UK’s oil and gas producers highlighted the potential of 33 new projects, targeting up to 1.3 billion barrels, as the UK looks to bolster energy security.

Held in Q2 every year, the North Sea Transition Authority’s (NSTA) Tier Zero session gathers the managing directors of the sector’s 22 largest operators to review the performance of the North Sea basin.

This year’s summit, held on Thursday, highlighted that 890 million of the aforementioned 1.3 billion barrels could be sanctioned as early as next year, as the regulator pushes operators to “rapidly deliver” projects, in the interest of “UK supply resilience.”

It also expects exploration and appraisal (E&A) activity to return to pre-pandemic levels, with 20 wells per year forecast to be drilled from 2022-24. That will be further charged by a new licensing round planned for later this year, and subject to the proposed Climate Compatibility Checkpoint.

The NSTA used the 28 April meeting to stress that an ongoing proactive approach is essential to surpass emissions reduction targets agreed as part of the North Sea Transition Deal (NSTD).

The regulator uses a series of benchmarking metrics to gauge industry performance. Notably, CO2 emissions for the UK upstream industry fell 14% to 12.1 million tonnes in 2021.

Flaring across the basin also fell by 19% year-on-year, while venting dropped by 24%.

The NSTA challenged operators to sustain these lower levels in 2022, when gas production is expected to rise, though praised the 80% of operators in attendance who already have forward plans covering asset upgrades, emissions reduction and platform electrification.

It also urged companies to “get production efficiency back on track”, as a large number of planned maintenance shutdowns on multiple installations, exacerbated by Covid-19 delays, impacted performance.

Following years of improvement on production efficiency, and the successful meeting of the sector’s 80% target in 2019, the metric dropped to 73% in 2021.

Following last year’s call for a step change in well decommissioning, the regulator reported “highly positive” signs, with campaign contracting models now gaining traction and its Energy Pathfinder portal listing 470 wells now awaiting decommissioning.

Discussions this year also highlighted opportunities to repurpose infrastructure for decarbonisation projects, such as CCS and H2, which are now a key area of focus.

The NSTA added that it would be launching a carbon storage licensing round “shortly.”

Chief executive Dr Andy Samuel said: “This meeting once again provided a good platform for positive action, supported by our suite of benchmarks and data insights. I am encouraged by the open, frank and productive dialogue. Many best practices and learnings were shared across the different operators.

“Companies are now progressing new projects that will strengthen energy security, while generating tax revenues, and creating and safeguarding thousands of UK jobs as part of an orderly transition to net zero. Importantly the industry reconfirmed commitment to halve production emissions by 2030 with progress well under way. The growing momentum on clean power to offshore installations, CCS and hydrogen was also very evident.”

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