The development of heavy oil in the UK goes back further than most people realise. All the way back to 1787, in fact. That was when miners struck a spring of natural bitumen while digging a tunnel for the Coalport Canal; indeed, with a little imagination the “Tar Tunnel” might be described as the UK’s first horizontal production well.
The largely brick-lined tunnel was intended to be used for a canal to transport coal from the mines. However, after about 300 yards the workmen had a very minor blowout on their hands as black natural bitumen began to flow into the tunnel. William Reynolds, the local iron master started production straight away, at first around 4,500 gallons of bitumen a week (15 bbls/day) were collected, and for several years over 1,000 gallons a week were being extracted, however this reduced to only 10 barrels a year by the 1820’s until finally in the 1840’s it virtually dried up. The tunnel is open to visitors, as it is part of the Ironbridge Gorge Museum, and if you go you will see that some oil still oozes into the tunnel today.
Of course, most of the UK's heavy oil is offshore and while some of that oil was developed in the nineties, it has taken until very recently for the next tranche of the resource base to attract the development capital it needs. Most of the fields that were developed back then, Harding, Alba, Gryphon et al, were quite deep reservoirs, between 5,500' and 6,500' feet; that means the reservoirs were warm which in turn meant that oil viscosities were in general quite low, around about 10 centipoise, even though the oil was indeed quite heavy, 18º to 21º API. The outlier in the group, was the Captain field, operated by Chevron, which has a reservoir depth of just less than 3,000' and an oil viscosity of about 90 centipoise. Production from these fields hit about 250,000 bbls/day in 1998 before starting a slow decline that continues today.
All these fields depended upon the new technology of the day – horizontal wells. By drilling horizontally the operators could drill a very long bore through the reservoir and keep the producing section well away from the oil water contact. The difference horizontal wells made to development economics was dramatic, and most, if not all, of the projects which came on stream in the nineties have been great successes. In all about 2.5 billion bbls of oil in place were developed, about 1.1 billion bbls have been produced so far and the operators expect to produce a bit less than 200 million bbls or so before the fields are abandoned.
Despite the great success of those projects, it has taken until very recently for a new tranche of fields to be approved for development; but the Kraken project, operated by Enquest, and the Mariner project, operated by Statoil, are now both underway at last. The reason for the delay is clear from the chart above; the viscosity in most of these undeveloped fields is well over 100 centipoise, and that high viscosity makes producing the oil that much harder. Just compare the difference in drinking a milk shake through a straw with drinking a coke to understand why.
Bentley is waiting on the blocks, Xcite has invested a lot of money in validating the reservoir performance they expect, and it will be very important for the industry that they succeed in bringing Bentley into production. Bressay nearly made it too, but perhaps we will have to wait for a recovery in the oil price for Statoil and Shell to have the confidence to sanction that project. Adding those two fields and The Steam Oil Production Company's Pilot field in the mix would mean that the second tranche of North Sea heavy oil projects should deliver over a billion bbls of reserves, and that heavy oil would contribute 200,000 bbls/day to the UK's oil supply for most of the 2020's. Given that UKCS production fell below 800,000 bbls/day in 2013, ensuring that this next tranche of development projects are all implemented will be critical to the future of the North Sea.