Oil company Hurricane Energy estimates that a billion barrels of recoverable oil could be contained in its Greater Lancaster field, some 100 kilometres west of the Shetland Isles.Although analysts believe the company, based in Surrey in SE England, will need an extraction partnership with a larger oil company, Hurricane said it was hopeful that production could begin as early as 2019.

“Exciting times”

Although far from the largest field in the UKCS – the Forties field, for instance, has already produced two billion barrels out of an estimated five billion – the discovery represents what Dr Robert Trice, Hurricane’s CEO, described as the start of “exciting times” for the company.“This is a highly significant moment for Hurricane,” he said. “We believe that the Greater Lancaster Area is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf.”Announcement of the find came as welcome news for the UK’s offshore industry, which has suffered worse than most following the dramatic fall in the price of oil over the past two years, primarily because production costs in the UKCS are so much higher than in many parts of the world.Deirdre Michie, chief executive of industry body Oil and Gas UK, said, “This is extremely exciting and welcome news for the UK Continental Shelf.“Hurricane Energy's announcement – coming just days after the Oil and Gas Authority awarded new licences to companies to explore for oil and gas in frontier areas – demonstrates the significant remaining potential of the UKCS.“Signs of optimism, mainly led by exploration and production companies, are returning to the basin, which has worked hard to reduce its costs and improve efficiency.“However, the UKCS needs fresh investment so it can capitalise on its potential, whether that be from new geological plays, or from enhanced recovery from existing fields. There are still up to 20 billion barrels of oil and gas to go after in the UKCS and we believe that makes the basin a very positive investment prospect indeed.”

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Significant potential

Paul Wheelhouse, minister for business, innovation and energy in the Scottish government, commented, “Today’s announcements of the first oil from the Flyndre field and the undeveloped discovery within the up to one billion barrels of oil equivalent thought to be recoverable from the Greater Lancaster field, make it clear that the continental shelf in waters adjacent to Scotland, such as areas to the west of Shetland, continue to hold very significant potential.“In total, it is estimated that up to 20 billion barrels of oil equivalent remains under the North Sea and in the wider basin.“Our draft Energy Strategy outlines that the Scottish government remains committed to maintaining domestic oil and gas exploration and production, and maximising economic recovery.“The UK government currently holds the key fiscal levers. While the outcome in the Flyndre and wider Greater Lancaster fields has been very welcome, it remains clear that without the right support for greater investment and activity, we risk losing vital capacity and skills which will support ongoing production and ensure we maximise economic recovery from the North Sea and best sustain domestic energy security.”

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