Asia has several large, oil-producing basins - from the Daqing Oil Field to the Malay Basin - but many are aging and in decline. And notwithstanding aggressive plans for renewables growth, Asia's growing population and rising standard of living will continue to fuel tremendous demand growth for crude oil. Could Asia's mature basins be renewed akin to how the Permian Basin has been revived, or even the North Sea? What lessons can be learned from these, and other cases, to help renew Asian basins?

Significant Resource Potential

Late-life fields contain significant resource potential. For example, the top nine late-life, oil-weighted basins in the North Sea offer more than 16 billion barrels of remaining recoverable resource - 22% of the North Sea total - including conventional and lower-quality conventional reservoirs within existing fields, plus potential upside from the application of existing technologies/expertise and yet-to-find resources. Only 85% of the North Sea oil resource has received advanced recovery methods, with an average recovery factor of about 40%, whereas recovery in fields that have not received advanced recovery methods have averaged only 26% - potentially suggesting another 4 billion barrels of oil to recover. Furthermore, the North Sea offers opportunity in discovered tight reservoirs - 26% of its roughly 374 remaining conventional reservoirs have permeabilities below 10 mD and would require stimulation.

Basin renewal generates a significant increase in the recoverable resources available through potentially four routes:

1. Greater application of IOR/EOR in late-life fields
2. Targeting lower-quality, previously discovered conventional resources (marginal fields)
3. Development of previously too difficult tight conventionals, and potentially
4. Development of unconventionals

We'll explore the Permian Basin revival and the renewal of the North Sea more in-depth in our whitepaper, Late-Life Basin Renewal: Lessons Learned from The Greater Permian Basin & North Sea.

Justin Pettit is Vice President, Upstream Energy at IHS Markit.

Mark Jelinek is Director, Upstream Oil & Gas Consulting and Research at IHS Markit.

Posted 25 April 2019

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.