Memorandum by Anton Ziolkowski, Professor
of Petroleum Geoscience, University of Edinburgh
THE PROBLEM OF BRITAIN'S SOURCES OF PRIMARY
Britain faces severe energy problems within
the next decade. Some of these problems may be solved within the
current framework and the PILOT vision. Other problems may not
be solved unless the Government takes action on its own. Specific
issues that fall into this category are the problem of exploring
the UKCS west of the Hebrides and the location of by-passed oil
in existing fields.
The current position for production of oil,
gas and coal in the UK is as follows:
The DTI Development of UK Oil and Gas Resources
2001 gives 2000 UK oil production at 126 million tonnes (a
decline of 8 per cent from 1999) and proven plus probable reserves
of oil as 1,010 million tonnes. The reserves-to-production ratio
for the UK is thus about eight years. The rate of discovery of
new reserves is declining and not keeping pace with the consumption.
On present trends we must expect to become net importers of oil
within about eight years.
Consumption of gas in the UK is increasing,
particularly for the generation of electricity. The DTI states
that UK gas production in 2000 was 115 billion cubic metres, while
proven plus probable reserves were 1,195 billion cubic metres.
Reserves to production ratio is thus about 10 years. We are already
beginning to import gas (1 per cent in 1998, 1.3 per cent in 1999).
BP Statistical Review of World Energy June
2001 contains figures that show UK coal production is now
only 19.5 million tonnes of oil equivalent per year (compared
with 56.4 million tonnes in 1990) and is declining at more than
10 per cent per year. UK coal is facing stiff competition from
abroad (imported coal now accounts for almost 50 per cent of our
consumption) and from gas. When uneconomic pits are closed down,
they usually fill with water, the unmaintained roadways tend to
collapse, and the reserves they accessed are sterilised. On present
trends we would expect to see the end of coal mining in the UK
within about 10 years, and all the UK coal reserves sterilised.
If nothing is done to extend the life of our
coal and hydrocarbon energy sources, we will soon have to import
the bulk of our primary sources of energy in the form of oil,
gas and coal. We will have to pay for the imports with exports.
This will essentially be a huge tax on the people of these islands
and will result in a reduction of living standards.
In the light of these difficulties, an increase
in nuclear power generation of electricity is regarded as essential.
Of course, nuclear power is not a substitute for oil, and the
problem of nuclear waste disposal has not been solved. Other alternative
sources of energy are not able to fill the anticipated gaps in
Britain's energy needs within the time frame that we expect to
face these problems.
Extending the life of the UK's non-renewable
energy resources is clearly critical to the future of the UK economy.
The Government's view is that this must take place as a co-operation
between Government and industry, with PILOT as the main forum
for this co-operation for the oil and gas industry. While PILOT
is addressing many of the major issues, there are aspects of the
situation that I feel should deserve more attention from the DTI.
Exploration in the Atlantic Margin
The area of the UK Continental Shelf west of
the Hebrides is vast: bigger than the whole of the UK sector of
the North Sea (see attached map). Much of this area has the same
potential for hydrocarbon accumulation as the North Sea itself,
but is largely unexplored. Exploration is hampered by the presence
of basalts, formed during the opening of the North Atlantic, and
covering the underlying Mesozoic sediments and possible oil-bearing
structures. Current seismic methods are unsuccessful at delineating
the structures beneath the basalt and provide little or no information
on which to plan a drilling programme. Drilling is therefore extremely
risky. Without good seismic data, the probability of drilling
dry holes is enormous.
Several oil companies, notably Conoco and Phillips,
have spent considerable sums in trying to solve the problem of
seismic sub-basalt imaging. They have met with some success, but
not enough to plan a successful drilling programme, and are giving
up. Other companies are interested in this area, but are not investing
heavily in research to solve the problem. The risk is too great.
Investment can reap better rewards in other parts of the world.
This is clearly an issue where the British national interest and
the interests of the oil companies do not coincide. In such a
situation, I believe the DTI should be proactive and commission
research to solve the problem, creating a realistic budget of
say, £10 million a year, to fund the research.
Locating By-passed Oil and Gas in Existing Fields
There are oil reserves in small fields that
are currently uneconomic to develop. There is also by-passed oil
in existing fields. These two kinds of reserves, both known as
"possible" reserves are different. The exact locations
of the by-passed oil "puddles" in existing fields are
not precisely known. If they were known, it would not be expensive
to produce the puddles, given the present infrastructure. On the
other hand, the locations of the reserves in small fallow discoveries
remote from existing fields are known, but the problem is the
high capital investment to produce them. There are billions of
barrels of by-passed oil in existing UK fields. The prize is therefore
The location of by-passed hydrocarbons in existing
fields is a technical problem.
Hydrocarbon reservoirs are partitioned, and
the existing infrastructure produces oil from some of the partitions,
but not all. Small partitions within the reservoir are often difficult
to detect. The resolution of conventional seismic reflection data
is simply not good enough to find them. One approach is to try
to improve the resolution of conventional seismic reflection data.
This is what the industry has been doing now in the North Sea
for nearly four decades. Step-change improvements in current techniques
are unlikely to occur.
However, a step change in seismic resolution
could be obtained by using seismic sources and receivers in wells
already present, or in new wells drilled especially for the purpose.
The reason this would work is that the sources and receivers would
be much closer to the target. At least a factor of ten increase
in resolution is achievable at the reservoir level (Ziolkowski,
1999). The technology to achieve this is well understood, but
has not been developed. If the technology already existed, the
incentive to use it in existing fields would be enormous.
However, there is no off-the-shelf multi-well
seismic-imaging technology. The hardware for the instrumentation
of the wells exists, but the cost of developing the complete technology
is of the order of £10 million. As a candidate for investment,
this particular technology is not high on the list of any major
oil company: competing candidates, mostly in other oil provinces
in the world, are higher on the list. This is another issue where
the British national interest and the interests of major oil companies
do not coincide and it is a clear candidate for a separate development
A number of research groups in the UK are very
interested in the problem of sub-basalt imaging, including Cambridge
and Leicester Universities, the British Geological Survey and
Veritas DGC. At the University of Edinburgh, in collaboration
with colleagues in other institutions and in companies, we have
been making a little progress in the problem of sub-basalt imaging
(Ziolkowski et al, 2001). The concept of multi-well seismic
imaging has been studied by a number of research groups and companies
around the world, particularly in the United States, but it suffers
from lack of investment. These two problems are much too important
to be left to the enthusiasm of a few poorly funded academics
and the hope that some oil companies might change their worldwide
investment priorities. There should be some serious Government
investment to get these problems solved in the national interest.
Development of UK Oil and Gas Resources, 2001,
The Stationery Office.
BP Statistical Review of World Energy June 2001,
Ziolkowski, A M 1999, Multi-well imaging of
reservoir fluids: The Leading Edge, 18, 1371-1376.
Ziolkowski, A, Hanssen P, Gatliff R, Li X-Y
and Jakubowicz H, 2001, The use of low frequencies for sub-basalt
imaging: Expanded Abstracts Seventy-first SEG Meeting, 9-14 September,
San Antonio, p 74-77.