In an email last week:
Recently a number of friends of mine have been telling me that the largest oil field in the world has been discovered encompassing BP Clair Ridge. They further tell me that the UK government has ordered BP to stay quiet about this until after the independence referendum. Now this seems unlikely to me to say the least but I wonder if you have any comment.
I agreed to write a short post setting out the facts as I understand them. I do not own any shares in BP, but many years ago I was involved in geochemical and mineralogical characterisation of the reservoir that led to the development of techniques still used today.
The rumour mill begins with Yes International that I presume is a pro-independnce source.
Prime Minister David Cameron became the first Prime Minister to visit Shetland in 34 years. His visit was shrouded in secrecy
David Cameron on a clandestine mission to Shetland accidentally allowed himself to be photographed with a Shetland pony and then inexplicably tweeted the picture blowing his cover. The Telegraph.
The story is then picked up by newsnetscotland who lead off with Rumours of massive oil find follow Cameron’s secret Shetland visit. The newsnetscotland article is in fact not so bad as the title suggests and some of the comments are well informed and place the whole story in an appropriate context.
A Brief History of the Clair Field
This account is based in part on an industry paper published in 1993 .
The Clair Field was discovered with well 206/8-1A drilled in 1977 (37 years ago!) that tested 25˚API oil at 1500 barrels per day (bpd). This flow rate was not commercial at that time with deep and hostile waters. In the following years to 1980 a total of 8 appraisal wells were drilled providing a wealth of information on this vast and complex reservoir but none of the well test results matched the flow rate from the original well. Bad news!
The reservoir comprises sediments of Devonian and Carboniferous age draped over the Archaean Lewisian basement. The reservoirs are of generally poor quality and fractured and this combined with the poor oil quality combined to give the disappointing low, sub-commercial flow rates. But the appraisal drilling did show that Clair contained a huge oil resource variably estimated to be between 5 and 7 billion barrels. This is Europe’s largest oil field but it lay undeveloped until 2005 since the resource could not be economically produced.
The operators returned in 1985 with another 2 disappointing wells and they returned again in 1991 with a three well appraisal program, this time using horizontal wells that produced much improved test results exceeding 3000 bpd. This set in motion a re-appraisal program culminating with a Phase 1 pilot development in 2005. Phase 1 included the deployment of a steel jacket platform with 15 production and 8 water injection wells. The pilot production area has since reached a maximum production rate over 57,000 bpd and produced 98 million barrels of oil and 870 million m3 of gas . Clair now has turned into a major success story by bringing to bear world class expertise and technology.
Clair Field production history as reported by DECC . Note units are cubic metres per month.
98 million barrels of produced oil from a “new” field is a lot in the context of the recent history of the North Sea but is still a tiny amount in the context of the overall oil resource present in Clair representing about 1.5% recovery to date. The success of phase 1 and the increasing knowledge base for the reservoir has spurred BP and partners on to a phase 2 development that is in process of being built as I write. Two additional steel jacket platforms have been deployed with a combined capacity of 120,000 bpd and aiming to produce 640 million barrels of oil. The Clair success story will run for many decades to come and no doubt there may still be some pleasant surprises and disappointments en route. The oil industry is traditionally secretive, choosing to announce results of exploration and appraisal drilling at times that maximise benefit to the company and its shareholders.
The Future of UK Oil and Gas Production
The five fold increase in oil price that occurred in the period 2002 to 2008 has spurred investment in the North Sea. Worryingly for the industry and the UK exchequer this has failed to stem declining production thus far . However, in addition to Clair there are another two large oil field developments in progress in addition to a host of smaller ones.
The Mariner field, operated by Statoil, has been sanctioned for development with first oil expected in 2017. Plateau production is predicted to be 55,000 bpd. Mariner is an ultra heavy oil field.
The Bentley field, operated by Xcite, is also ultra heavy oil and is undergoing a phased development. While the field contains a large resource approaching 1 billion barrels, the maximum flow rate achieved thus far is a modest 2,900 bpd (facilities constrained). A field development plan is not yet in place.
These ultra heavy oil fields require sustained high oil price to be profitable and represent the sludge in the bottom of the North Sea barrel. Clair phase 2 and Mariner combined may arrest or even partially reverse the long term decline of the North Sea. But once both fields reach plateau, basin wide declines will re-establish the downwards trend of UK oil production.
The development of Clair and Mariner will only provide short respite from the long-term decline of North Sea oil production
 D. Coney et al; Clair Appraisal: the benefits of a co-opetative approach. In Petroleum Geology of NW Europe 1993. Edited by J. R. Parker
 Energy Matters UK North Sea Oil Production Decline