One of the themes of 21st Century oil and gas exploration has been how the sector can get at hydrocarbon reserves that are deemed uneconomical using traditional equipment and methods. Major players like Royal Dutch Shell plc think they have the answer to exploiting what have long been regarded as “stranded” gas reserves via the Prelude FLNG project. But small oil and gas companies can be innovative too.
Enegi Oil plc is a small exploration and production company, which had been focused on a variety of onshore and offshore exploration projects in Canada and Ireland for several years. However, the firm had operational problems with assets it had acquired in Newfoundland that “precipitated considerable soul-searching,” Enegi CEO Alan Minty said, about what small-cap oil and gas firms should be doing.
“They’ve got to try and avoid risk concentration. If you’ve got one major exploration asset and you get it wrong you’ve got to go back to the market to get more funding, you’ve lost credibility and you’re still living with the fundamental uncertainty of that type of asset,” Minty told Rigzone in a recent interview.
So Enegi began talking to an engineering firm called Advanced Buoy Technology (ABT) to explore its concept for using a floating buoy to extract oil and gas from an offshore reservoir. And in March 2012 the company entered into a strategic partnership with ABT to apply for offshore licenses in the UK North Sea under the 27th Seaward Licensing Round.
The idea was to use ABT’s expertise in buoy technology to come up with a way of commercializing hydrocarbon assets in the North Sea that were too small to be exploited by traditional means, such as by installing an oil platform or using an FPSO (floating production, storage and offloading) vessel. At the time, Enegi pointed to research from Wood Mackenzie that estimated there were some 287 discovered fields in the UK North Sea, containing approximately 2.2 billion barrels of oil and 9 trillion cubic feet of gas, that were considered non-commercial. ABT and Enegi also identified 58 discovered fields in the UK North Sea that were technically suitable for development using buoy technology.
Since then, Enegi has managed to find more fields, according to Minty.
“We’ve trawled through several databases and we’ve identified slightly under 600 marginal fields that are suitable for this technology, with about a third of those in the North Sea,” he said.
Information from Rigzone was used in this report.