TWENTY-THREE COMPETITORS NORTH SEA OIL SEEK
By Lieutenant-Commander Trevor Blore, R. N. R.
Issued by British Information Services - The Certificated Engineer May 1965.
The petroleum industry, providing for most of the world's demand for energy and power, is the most complex web of interlocking interests ever known. All over the globe the discovery, winning, transportation and marketing of oil and its associated gases and products are carried out by companies and groups of companies of various nationalities, sometimes working in the closest association on a wide range of developments.
Only a few specialists really knew the full details of this world-wide-web of oil interests. But it is safe to say that never before has there been such a concentrated international effort as the search for oil and natural gas now going on in the British sector of the North Sea.
On the strength of exploratory work programmes submitted, the British Government has granted 23 companies or groups licences to seek and develop oil and/or natural gas deposits which may be found beneath the 100 000 square miles of the North Sea under British jurisdiction. British financial participation in this enterprise is estimated at around one-third.
This international treasure hunt enters its crucial phase with the drilling of the first exploratory test wells far out at sea off the east coast of England.
Geologists and geophysical surveyors have long suspected that the North Sea, by virtue of its geo-physical history, might well cover important petroleum deposits. The great sedimentary deposits of its bed suggest the possibility of oil, and/or natural gas.
In 1936, the British Petroleum Company, BP-then is known as the D' Arcy Exploration Company-started a search for oil in the homeland, and soon located small natural-gas fields in Scotland and Yorkshire. Next came the discovery of small but workable oil-fields in the English Midlands. Across the North Sea, more substantial oil and gas fields were located in Germany and subsequently in Holland.
By comparing the rock strata in this triangle of oil areas, it was possible to draw a geophysical picture of north-west Europe's shallow seas and adjacent land areas for the geological periods, millions of years ago, when the rock formations of the English, Dutch and German oilfields were being laid down. The resultant indication of possible petroleum deposits under the North Sea was further strengthened by experiments carried out by Mr A. H. Stride, of the British National Institute of Oceanography, and Professor Maurice Ewing of Lamont Geological Observatory.
By seismic refraction, they probed at least 11 000 feet of sedimentary material which they assessed as 00 feet of clay and chalk over 8 000 feet of limestone or sandstone-possible oil formation.
Start of North Sea Investigations
But it was the discovery, in 1959, at Slochteren in northern Holland of Europe's greatest natural gas field which sparked off the present North Sea hunt. This gas field development, by a Shell-Esso combination representing, in the main, British, American and Dutch interests, has been officially estimated to have no less than 1 100 000 000 000 cubic metres of reserves.
Geologists now looked north across the sea for likely rock strata which could extend as far as the Scottish or even the Norwegian coasts, and also to westward extensions, under the sea, of the German oil and gas deposits.
International interest began to focus on the British sector of the North Sea. A number of geophysical surveys were launched over the area between the Straits of Dover and the Shetland Islands. At one time there were about twelve ships engaged in seismic surveys of the strata beneath the North Sea, detonating explosive charges under the water and measuring the reflections or echoes of the sound waves from the deep rock formations under the sea-bed. Aircraft carrying magnetometers and gravity meters also played a part in the surveys: and, it is believed, helicopters-working in pairs-were used for the first time on a seismic survey in awkward or dangerous waters.
The co-operative nature of the oil industry was well illustrated by one of the more extensive surveys. In this non-competitive stage of seeking basic information, which could easily run up to ￡1 000 000 over a couple of years, BP teamed up with the Shell-Esso combination. But, of course, when it comes to the vital drilling stage, BP will be on its own again.
By the end of the 164 surveying season, which is largely governed by weather conditions, results of the BP-Shell-Esso operation, and others conducted by such combinations as the British Gas Council and three experienced American partners, showed sufficiently favourable indicators to justify going ahead with the enormous expenditure necessary for the make-or-break stage of the treasure hunt: the drilling of test-wells off the British coast.
In any part of the world, on land or undersea, geologists and geophysicists can indicate where oil or gas may be found, but only costly drilling can prove if they are there and in sufficient quantity and quality to justify the further expenditure of millions of pounds on commercial exploitation.
The successful test-well is always a long shot.
Experience has shown that, even on land, the average is eight or nine dry holes bored for every exploitable deposit located.
Allocation of Licences
With the surveys showing favourable conditions, the British Government came into the picture as the overall controller of the oil hunt in the western half of the North Sea. Under an international convention, finally ratified by the requisite 22 nations by the middle of 1964, the United Kingdom acquired sovereign rights over half the North Sea, which rated as Britain's 'continental shelf' for the purpose of exploring and exploiting natural resources on and beneath the sea-bed.
Under an Act of Parliament, Britain's Ministry of Power was authorised to lay down regulations and grant licences for the exploration and exploitation of this 'shelf.' The Ministry, therefore, divided the sea zone into blocks of approximately 100 square miles each and laid down the terms for licensing companies to explore these areas and exploit any carboniferous deposits discovered.
Since September 1964, the Ministry has announced allocation of licenses to 23 companies and consortia. On the strength of the work programmes submitted, British officials estimated that the licensees would spend at least ￡80 000 000 on the treasure hunt off the east coast of England in the next five to six years. British participation accounts for one-third of the total licences so far granted.
But taking all factors into consideration-such as the cost of new sea-going drilling rigs, shore bases, supplies, air and sea transport, communications and continuing geophysical surveys to locate exactly the best drilling areas-experts consider that the Ministry figure is rather conservative, and that upwards of ￡100 000 000 might be more realistic.
Probably the largest single interest engaged in this vast enterprise is BP Petroleum Development, representing an oil empire in which the British Government holds 51 per cent of the shares.
Other major interests include Britain's Gas Council, in partnership with three American companies, and the old-established Burmah Oil Company which has, as one of its partners, the huge industrial organisation of Imperial Chemical Industries Ltd. (I.C.I.).
These are a few of the main contenders for the fabulous prize of a North Sea oilfield. And the hunt is on. First to be ready to start drilling is Amoseas (American Overseas Petroleum), jointly owned by Texaco and Standard Oil of California. which has had a drilling barge called Mr Cap modified for North Sea conditions and is ready to face winter conditions about 150 miles off Newcastle-upon-Tyne.
The next contender to start drilling looks like being BP, which plans to start operations about 40 miles off the Yorkshire coast in the predictably easier weather conditions of April. BP is starting with an oil drilling rig, brought from Trinidad, mounted on a working barge or platform normally employed on big civil engineering projects at sea by the British construction undertaking George Wimpey and Company Ltd.
Third, in the field will probably be Shell U.K.
Exploration and Production Ltd., operating in this venture on behalf of the Shell-Esso partnership. This company is having a 6 000-ton mobile rig towed across the world from the East Indies, where it has been working, for adaption to meet North Sea conditions in time to start drilling a first test-well early next summer.
Shell and BP are both having huge new seagoing drilling platforms built in British shipyards to join the North Sea operation in 1965 or early the following year. Already, six new mobile rigs, including those for BP and Shell, have been ordered.
At the same time, the licensed companies will be establishing shore bases along the east coast of England obtaining supply ships, helicopters, and communications systems and arranging a score of other supplementary facilities to maintain some 50 men living and working on each platform.
Drilling Operations
These men must keep the drills boring without a break throughout the year. For both physical and economic reasons there can be no relaxation of effort until a well going down 10 000 or more is cased or abandoned as a dry hole.
The nature of the well, consisting of a series of pipes of decreasing diameter, has been described in a recent paper by a British scientist, F. G. West, read to the Institution of Engineers and Shipbuilders in Scotland. He said: 'A typical 14 000-feet deep hole on the high seas in, say, 150 feet of water would consist of 200 feet of 26-inch pipe embedded in the sea-bottom, 500 feet of 20-inch pipe, 5 000 feet of 13.375-inch, 12 000 feet of 9.625-inch, and 14 000 feet of 7 -inch.
'All these 'strings' of steel pipe start from the surface where they are connected together in forged steel housings that are termed the casing head. Usually, a final string of pipe, about three inches in diameter, called tubing, is run inside the last casing string to serve to bring the oil and gas to the surface. The whole top assembly is called the well-head, on which are mounted control valves and equipment.
The drilling of the hole is effected by rotation of a toothed bit at the end of vertical steel shafting the drill pipe. This, typically, is of 4.5-inch diameter and weighs 18 pounds per foot run.
'As drilling progresses, the drilling 'string' is lengthened by sections of 30 feet. Down the centre of the drill pipe (through which the boring bit is operated) is pumped heavy mud which, emerging at the bit, serves to clear it and then bring the cuttings to the surface. This mud also is necessary to plaster the walls of the hole and to keep in check, by column pressure, any gas or oil that is encountered.'
This is the long and arduous operation to be performed scores of times off the British east coast in the next few years, with odds of ten-to-one against the lucky strike. By the middle of 1966, fleets of tugs should be moving a score of drilling barges from point-to-point as the search goes on.
In most of the areas, the depth of sea will permit the drilling platforms' steel legs to be extended to the bottom to provide maximum stability for the drilling platform high up above storm-level seas. For instance, the drilling rig Mr Cap is starting work in about 85 feet of water on the fishing grounds known as the Dogger Bank, and BP's first test-well should go down in about 100 feet of water.
In deeper waters, mobile drilling rigs must be supported on legs standing on deeply submerged pontoons and be moored by six or more giant anchors.
The platforms themselves are remarkable, self-contained villages, where men can live and work in reasonable comfort, and with powerful diesel-engined plants to drive the drills and provide the electric current and other power for a variety of purposes such as the lighting and air-conditioning of living quarters and hoisting engineering and personal supplies from tenders.
All this is a beginning. Even when a strike is made, years of development lie ahead before the new field of oil or gas can be harnessed and commercially exploited. It can take from one to three years to determine whether the pocket of oil or gas struck by the first successful test well is of sufficient size and quality to justify the next costly stage of production.
The next stage can take a further two to five years before any oil or gas can reach the ultimate consumer. A number of production wells must be drilled, and permanent production platforms built. Then comes the problem of getting the oil or gas ashore, presumably through large-diameter pipelines laid on the sea-bed, and setting up shore facilities.
It would seem that, even with the greatest good fortune, the North Sea hunt with drilling rigs, which is just beginning, could not put new oil or gas on the British market much before 1970.