Summary
Shallow gas discoveries made as long ago as the 1970s are finally being commercialized. Long considered a nuisance, the costs and technical challenges are now available to commercialize this resource. Chevron appears to be on track to commence production near year end.
Analysis
As oil operators explored in the North Sea, it was not uncommon to encounter shallow gas reservoirs. These reservoirs could constitute actual drilling hazards in spite of their low pressures. the potential to lose circulation by having excessively hevy drilling mud could inadvertently allow significant gas flows to the surface.
Few operators tried to commercialize such shallow sands. Their low pressures meant that relatively small volumes of gas would be stored in a given volume of reservoir and that flow rates would be limited. The shallow formations tended to be loosely consolidated and would require sophisticated completions to retain the formations and maintain adequate flow rates.
Chevron's project to develop several Dutch North Sea shallow gas fields has been underway for years and is now approaching completion. They should be on production by year end. The amounts of gas are not huge by the scale of European demand. However, there is a lot of shallow gas that is yet to be commercialized in the North Sea.
