REVIEW: PROSPEX 2016 – The green shoots of recovery?
Review by Matt Farris, Maersk Oil North Sea UK Ltd
In what has been a very difficult year for the oil industry, PROSPEX once again delivered a great conference event for UK and international exploration. Low oil prices and continued uncertainty in the sector are always likely to impact attendance at a show like PROSPEX, and numbers can be reduced in a PETEX year, but the show still attracted 74 exhibitors and an enthusiastic 767 attendees, illustrating the high regard in which the event is held.
In its 14th year, Prospex 2016 once again proved to be a colourful part of the exploration calendar. At a time when exploration budgets have been somewhat challenged and many of our colleagues and contacts have moved-on or been unfortunately lost to the industry, the event provided a great opportunity to network, discover new contacts across the business and, perhaps most importantly, re-engage with old contacts, colleagues and friends. It provides a place for companies to market their prospects and meet with potential investors – all the key stakeholders in one place for two days – it makes for a very busy agenda. Certainly, the attention given to prospects featured in the various booths demonstrates the high level of interest in the UK sector and suggests there are deals to be done in 2017.
With the Oil & Gas Authority well represented at the conference, PROSPEX also allowed the exploration community to engage freely with the Authority – all the more important given the recent wide-ranging changes to the regulatory body during 2016.
Day one of the conference was introduced by the Chair and President Elect of the PESGB, Nick Terrell from Azinor Catalyst. An interesting Keynote was given by Gunther Newcombe, Director of Exploration & Development at the Oil & Gas Authority, who reconfirmed the role of OGA and its approach to “striking the right balance” with its new powers. Gunther highlighted that the OGA were on track to meet their exploration priorities and will update and refresh the UK Yet-To-Find, which remains significant. He highlighted that while drilling in 2016 was at a low, success rates had been good and there had been a significant focus on Frontier exploration activity in the last 2 years. 2017 should see an increase in exploration wells drilled. Gunther closed by introducing a programme of varied License Rounds and Asset Stewardship expectations that will be implemented in 2017 (something we will all need to adjust for and meet) and by pressing that continued collaboration is paramount for the success of UK exploration.
The first session also included a fascinating exploration success story – Hurricane’s Basement Play West of Shetland, presented by Alistair Stobie. This was a timely reminder that sometimes the upside comes in and that perhaps we don’t know everything yet! Here, the oil column is greater than the mapped structural closure, with significant follow-up potential secured by Hurricane in adjacent blocks. Given the steer from OGA, that collaboration is paramount for success, this was perhaps an ideal example for the industry to note – collaboration between oil company and OGA has helped move the project forwards quickly (e.g. out-of-round application); an imaginative and pragmatic approach by Transocean and Bluewater has led to a successful commercial case, leading to Hurricane being able to secure funding from Kerogen Capital in an otherwise difficult financial climate. It goes to show what can be achieved if we plan for success.
The rest of day one focused on prospects-to-go, starting with some interesting UK North Sea opportunities. This was followed by thought-provoking prospects onshore in the UK presented by Egdon, Third, SCDM, Swift; and West of Shetlands/Faroese prospectivity presented by OMV, Parkmead and the Jardfeinghi, all demonstrating that there remains a healthy drillable portfolio of opportunities in the UKCS.
Day two took on a more international feel, with more opportunities presented from the Nederlands, Isle of Man, Malta, the Falklands and the Adriatic. We were treated to a presentation by Philip Holloway, Petro Matad LLC, on opportunities in Mongolia – who wasn’t struck by the prospect of exploring a new basin with the source rocks outcropping around the margins!
This year again, presentations on Ireland proved very popular. Opportunities were presented by Providence, Europa and Faroe, with further prospects presented at the booths. At the evening receptions there was much discussion over the planned 2017 well by Providence Resources on the Druid and Drombeg prospects.
The Presidents Evening followed at the end of PROSPEX and was held just a short walk away at the Islington Islington Assembly Hall. This was a chance to wind down after the busy PROSPEX schedule and catch up with yet more colleagues and friends.
Well done to the PESGB and OGA for another highly successful PROSPEX Fair and our thanks to all of the presenters! As I write Brent is at $57/bbl – let’s hope that this year’s fair marked a turning point in the industry, readying us for an upswing of activity in 2017.