North Sea oil 858340 223476852 2008-07-04T06:40:41Z Jaraalbe 261435 reclassify {{Unreferenced|date=March 2007}} '''North Sea oil''' refers to [[Petroleum|oil]] and [[natural gas]] ([[hydrocarbon]]s) produced from [[oil reservoir]]s beneath the [[North Sea]]. In the oil industry, "North Sea" often refers to a larger geographical set, including areas such as the Norwegian Sea and the UK "Atlantic Margin" (west of Shetland) not, strictly speaking, part of the North Sea. ==History== North Sea oil was discovered in the early 1960s,<ref> Norfolk Museum and Archaeology service [http://www.museums.norfolk.gov.uk/default.asp?Document=200.44.13]</ref> with the first well coming on line in 1971 {{Fact|date=March 2007}} and being piped ashore from 1975, <ref> ''BBC'': 1975: North Sea oil begins to flow[http://news.bbc.co.uk/onthisday/hi/dates/stories/november/3/newsid_2538000/2538155.stm]</ref> but the fields were not intensively exploited until [[oil crisis|rising oil prices]] in the 1980s made exploitation economically feasible. Volatile weather conditions in Europe's North Sea have made drilling particularly hazardous, claiming many lives. The conditions also make extraction a costly process; by the 1980s costs for developing new methods and technologies to make the process both efficient and safe, far exceeded [[NASA]]'s budget to land a man on the moon. <ref> ''TIME'': High costs, high stakes on the North Sea [http://www.time.com/time/magazine/article/0,9171,913489,00.html]</ref> In reality, oil seeps had been known from coal beds on either side of the North Sea, but only a limited amount of development had occurred {{Fact|date=March 2007}} ([[Eakring oil field]], [[Nottinghamshire]], [[England]]; [[Edinburgh Oil Shales]] (which seem unrelated to later discoveries); and small discoveries in the [[Netherlands]] and Northern [[Germany]]). A "demonstration well" was sunk in 1938 in association with the World Petroleum Congress at The Hague. {{Fact|date=March 2007}} After the Second World War a small number of onshore gas and oil fields were found in 1959, {{Fact|date=March 2007}} an academic well drilled at Ten Boer near Groningen, Netherlands was deepened and discovered a significant gas deposit. {{Fact|date=March 2007}} Appraisal and development wells over the next few years brought the realisation in 1963 that the [[Groningen gas field|Groningen field]] was not just "economic", nor even "big", or "large", or "giant", but was an "elephant" field of huge potential. {{Fact|date=March 2007}} Given that, extending exploration into adjacent areas was an obvious decision. The exploration of the North Sea has been a story of continually pushing the edges of the technology of exploitation (in terms of what can be produced) and later the technologies of discovery and evaluation ([[2-D seismic]], followed by [[Three-dimensional space|3-D]] and [[Fourth dimension|4-D seismic]]; sub-salt seismic; immersive display and analysis suites and supercomputing to handle the flood of computation required). {{Fact|date=March 2007}} ==Licensing== There are five countries with North Sea Production. All operate a tax and Royalty licensing regime. The respective sectors are divided by median lines agreed in the late 1960s: *'''[[United Kingdom]]''' - licences are administered by the '''DTI''' ([[Department of Trade and Industry]]- [http://www.og.dti.gov.uk/ Website]). The UKCS (United Kingdom Continental Shelf) is divided into quadrants of 1 degree latitude and one degree longitude. Each quadrant is divided into 30 blocks measuring 10 minutes of latitude and 12 minutes of longitude. Some blocks are divided further into part blocks where some areas are relinquished by previous licensees. For example block 13/24a is located in quad 13 and is the 24th block and is the a part block of this block. The UK government has traditionally issued licences via periodic (now annual) licensing rounds. Blocks are awarded on the basis of the work programme bid by the participants. The UK DTI has been very active in attracting new entrants to the UKCS via Promote licensing rounds (less demanding terms) and the fallow acreage initiative where non-active licences have had to be relinquished. *'''[[Norway]]''' - licences are administered by the '''NPD''' (Norwegian Petroleum Directorate [http://www.npd.no/English/Frontpage.htm Website in English] ). The NCS is also divided into quads of 1 degree by 1 degree. Norwegian licence blocks are larger than British blocks, being 15 minutes of latitude by 20 minutes of longitude (12 blocks in a quad). Like Britain there are numerous part blocks formed by relicensing relinquished land. *'''[[Denmark]]''' - The Danish sector is administered by the '''Danish Energy Authority''' ([http://www.ens.dk/sw11492.asp website in English]). The Danes also divide their sector of the North Sea into 1 degree by 1 degree quadrants, their blocks however are 10 minutes latitude by 15 minutes longitude. Part blocks exist where partial relinquishments have taken place. *'''[[Germany]]''' - Germany and the Netherlands share a quadrant and block grid - quadrants are given letters rather than numbers. The blocks are 10 minutes latitude by 20 minutes longitude. Germany has the smallest sector in the North Sea. *'''[[Netherlands]]''' - The Dutch sector is located in the Southern Gas Basin and shares a grid pattern with Germany. ==Reserves and production== The British and Norwegian sections hold most of the remainder of the large oil reserves. Estimates say that in the Norwegian section alone lie 54% of the sea's oil reserves and 45% of its gas reserves.<ref>{{Citation |last =Jan Hagland, |first =Director of Information for the Norwegian Petroleum Directorate |author-link = |last2 = |first2 = |author2-link = |title =Oil & Gas in the North Sea - ExploreNorth |date = |year = |url =http://explorenorth.com/library/weekly/aa091500a.htm |accessdate = 2007-07-24}}</ref> More than half of the North Sea oil reserves have been extracted, according to official sources in both Norway and the UK. For Norway, the NPD <ref> Norwegian "Facts 2007" official report, available freely here, [http://www.npd.no/NR/rdonlyres/4E929265-F111-4578-ADF3-20480CA09E0A/0/Facts_2007_engelsk.pdf], page 82 </ref> gives 4601 million cubic meters (corresponding to 29 billion barrels) for the Norwegian north sea alone (excluding smaller reserves in Norwegian sea and Barents Sea) ultimate of which 2778 (60%) already produced to January 2007. UK sources gives a range of reserve estimate, but even using the "maximum" estimate of ultimate recovery, 70% have been recovered at end 2006<ref>Estimate from DTI [https://www.og.berr.gov.uk/information/bb_updates/chapters/Table4_3.htm]</ref>. Note the UK figure includes fields which are not in the North Sea (onshore, West of Shetland). Exact figures are debatable due to the nature of estimating oil reserves and the impossibility to predict the future discoveries. Most [[oil company|oil companies]] have investments in the North Sea. [[Oil peak|Peaking]] in 1999, production of North Sea oil was nearly 6 million [[barrel (unit)|barrel]]s (950,000 m³) per day. [[Natural gas]] production was nearly 10 trillion cubic feet (280,000,000,000 m³) in 2001 and continues to increase, though the British production is in sharp decline <ref> Official British production figures [https://www.og.berr.gov.uk/information/bb_updates/appendices/Appendix10.htm]</ref>. [[Brent crude]] (one of the earliest [[crude oil]]s produced in the North Sea) is still used today as a standard [[Benchmark (crude oil)|benchmark]] for pricing oil. UK North Sea oil production was 2.7m barrels per day at its 1999 peak<ref>North Sea Oil Production and its Relationship to Global Oil Production[http://www.energybulletin.net/node/17262]</ref><ref>Financial Times article: Plan now for a world without oil[http://www.hubbertpeak.com/uk/planNow.htm]</ref><ref>Moneyweek - "Oil: Who turned off the taps?"[http://www.moneyweek.com/file/48644/who-turned-off-the-taps.html]</ref>, and has decreased every year since according to the Royal Bank of Scotland Oil and Gas Index; down 8% in 2001<ref>RBS Press Release - 20 August 2001[http://www.rbs.com/media03.asp?id=MEDIA_CENTRE/PRESS_RELEASES/2001/AUGUST/20_OIL_GAS]</ref>, down 4.6% in 2002<ref>RBS Press Release - 26 September 2002[http://www.rbs.com/media03.asp?id=MEDIA_CENTRE/PRESS_RELEASES/2002/SEPTEMBER/26_OIL_GAS]</ref>, down 8.2% in 2003<ref>RBS Press Release - 28 April 2003[http://www.rbs.com/media03.asp?id=MEDIA_CENTRE/PRESS_RELEASES/2003/APRIL/28_UK_OIL_GAS]</ref>, down 10.9% in 2004<ref>RBS Press Release - 2 June 2004[http://www.rbs.com/media03.asp?id=MEDIA_CENTRE/PRESS_RELEASES/2003/APRIL/28_UK_OIL_GAS]</ref>, down 11.6% in 2005<ref>RBS Press Release - 24 March 2005[http://www.rbs.com/media03.asp?id=MEDIA_CENTRE/PRESS_RELEASES/2005/MARCH/24_OIL]</ref>, down 11% in 2006<ref>RBS Oil and Gas Index 2006[http://www.rbs.com/content/economic/downloads/uk/OG2906.pdf]</ref> and down by 8% in 2007. Average oil production in January 2008 was 1.2m barrels per day compared to the 1999 peak of 2.7m barrels per day<ref>RBS Oil and Gas Index - May 2008[http://www.rbs.com/content/economic/downloads/uk/oil_gas_may_08.pdf]</ref>. This was the largest decrease of any other oil exporting nation in the world, and has led to Britain becoming a net importer of crude for the first time in decades, as recognized by the [[energy policy of the United Kingdom]].<ref>[http://news.independent.co.uk/business/news/article1269433.ece ''The Independent'']</ref> The production is expected to fall to one-third of its peak by 2020. {{Fact|date=February 2007}} In Spring 1999, a prospected oil field, later named Buzzard, came in as the largest discovered in the past 25 years, with producible reserves of almost {{convert|500|Moilbbl|m3}}. While significant, this is less than the amount of oil consumed globally in a single week.<ref>David Strahan, 2007 - The Last Oil Shock; Pages 61 & 62.</ref> A revised forecasts in 2002 suggested it may contain more than one billion barrels of oil.<ref>[http://news.bbc.co.uk/1/hi/scotland/2055734.stm ''BBC NEWS Scotland'' "Hopes rise for new oilfield"]</ref> ==See also== {{EnergyPortal}} *'''[[List of oil and gas fields of the North Sea]]''' *[[List of oil fields]] *[[:Category:Oil fields in Norway|Oil fields in Norway]] *[[Economy of Norway]] *[[Economy of the United Kingdom]] *[[Geology of the United Kingdom]] *[[United Kingdom Climate Change Programme]] *[[Energy use and conservation in the United Kingdom]] *[[Economy of Scotland]] *[[Oil platform]] *Proposed [[oil phase-out in Sweden]] *[[Subsea]] ==External links== *[http://www.eia.doe.gov/emeu/cabs/northsea.html North Sea oil at the (US) Energy Information Administration] *[http://www.shell.com/home/Framework?siteId=uk-en&FC2=/uk-en/html/iwgen/leftnavs/zzz_lhn2_4_2.html&FC3=/uk-en/html/iwgen/shell_for_businesses/exploration_production_shared/north_sea_pages/factsandfigures_01041350.html Shell UK] *[http://www.olf.no/english/ OLF Norwegian Operators association] *[http://www.pesgb.org.uk/pesgb/system/default.asp Petroleum Exploration Society of Great Britain] *[http://www.ukooa.co.uk/ United Kingdom Offshore Operators Association] *[http://www.pse-operator.pl/index.php?lang_id=2 Danish North Sea oil and gas production], Danish Energy Authority ==References== {{reflist|2}} {{Scotland topics}} [[Category:North Sea energy|Oil]] [[Category:Economy of Scotland]] [[Category:Energy in Europe]] [[Category:Oil fields]] [[de:Nordseeöl]] [[fr:Régions pétrolifères en Europe]] [[ja:北海油田]]