Issues and policies affecting the

operation at Wytch Farm, UK

Energy Policy

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Table of Contents

Introduction 2

Operations carried out at Wytch Farm 2

Energy and climate change policies 4

Issues affecting the operation 5

Long term future for Wytch Farm 7

Conclusion 9

List of References 10

Glossary 12

1
Introduction

Oil industry in the Wessex Basin has been a motor of the region’s economic and
social development, combining the commercial success with highest standards of
environmental management. Development of Wytch Farm, the Western Europe’s
largest onshore oilfield, allowed for establishing hydrocarbon production of
national significance, within an area of the highest environmental sensitivity.

This report provides an overview of operations carried out at Wytch Farm and the
impact of national energy and climate change policies upon them. A critical
review of social, political and environmental issues affecting the operation allows
to consider the long-term future for Wytch Farm and the transition to a low-
carbon environment.

Operations carried out at Wytch Farm

History

Wytch Farm reserves, located on the southern shores of Poole Harbour in Dorset,
as illustrated in Figure 1, were discovered in 1974, followed by the DCC extraction
permission to British Gas in 1976 (DCC 1998). In 1984 BP took over Wytch Farm,
successfully operating the oilfield until 2011, when Perenco UK Ltd acquired the
stake majority, continuing the field development (Perenco 2014).

Figure 1. Wytch Farm location. Wytch Farm underlies the low, heath-covered country on
the south side of Poole Harbour, and extends eastwards beneath the coast and offshore
into Studland Bay. Sourced from: BP (2003)

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Exploration

Interest in commercial oil exploration in the area dates from the 1930s, as
multiple natural seepages occur on the Purbeck coast. Intensive seismic
surveying allowed extraction from the Wytch Farm, Wareham and Kimmeridge
Oilfields, from 3 producing reservoirs, as illustrated in Figure 2, namely Bridport,
Sherwood and Frome.

Figure 2. South-north cross-section through Wytch Farm. The reservoir rocks at Wytch
Farm are: Bridport Jurassic sandstone, 924m below surface at 40 °C, 100 bar; Sherwood
Triassic sandstone 1585m below surface at 65°C, 165 bar – contains the majority of
hydrocarbon reserves; Frome Clay rich, shelly limestone formed from ancient oyster beds
750m below surface. Explanation based on: BP (2003). Sourced from: Colter and Havard
(1981)

Extraction

Wytch Farm development, consisting of 103 wells, 54 producers and 29 injectors

operating from 10 sites, currently (2014) produces 21,000 oil bbl/day, with
associated gas and LPG. Good reservoir characteristics allowed utilising not-lined
open-hole completion, topped with either beam or electric submersible pumps for
high fluid volumes. Throughout operation, substantial modifications, including
ERD, MGI and multilateral wells reaching both onshore and offshore, increased
production rates and maximised reservoir productivity.

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Transportation

Figure 3. Wytch Farm transportation diagram. Based on: PMMMG (2001)

Extracted fluids are separated at the Gathering Station, as illustrated in Figure 3 .

Natural gas is extracted first and after adding the odorant, transported by
pipeline to the national system. LPG produced next is distributed by road
tankers. The remaining oil is exported to Hamble Oil Terminal, via
the 90 km Purbeck-Southampton Pipeline, then to be exported on ship to
refineries across the English Channel. Wells also produce 96% of highly saline
waters, separated from oil, topped up with sea water and re-injected into
reservoir.

Energy and climate change policies

Wytch Farm falls under multiple energy and climate change policies, affecting the
full spectrum of operation. Hydrocarbon exploration requires a DTI licence,
separate for on and offshore operations. Dorset area, including Wytch Farm, is
subject to a single Petroleum Exploration and Development PEDL48 licence,
awarded in 1998. English Nature and the Environmental Agency hold a statutory
role as advisers, controlling Discharge Contents to watercourses. Offshore,

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DEFRA and JNCC determine projects requiring environmental assessment during
exploration phase. Under the EU Environmental Assessment Directive
(87/337/EEC), Wytch Farm is required conducting a full environmental
assessment prior any new well development. Locally, DCC sets out policies for oil
and gas in the Minerals and Waste Plan (DCC 1998: 2). Currently DECC regulates
the environmental aspects of hydrocarbon exploration and production, liaising
with international bodies, such as the EU and OSPAR. At the regional level,
Health and Safety Executive is responsible for setting safety standards,
inspections and designating COMAH sites. Climate change policies at Wytch Farm
include the EU ETS and CRC energy efficiency scheme (Perenco 2012), regulating
the oilfield carbon emissions. Located in an environmentally sensitive area, the
oilfield falls under EU designated sites including RAMSAR, SPA as well as local
conservation regulations, namely Purbeck Heritage Coast, Jurassic Coast World
Heritage, SSSI Natural Reserve and AONB (DFC 1999). The operation complies
with ISO14001 environmtntal standards (BP 2007). Recently, the oilfield granted
39 planning applications, extending the field life to 2027, however the agreement
requires restoration of the local ecosystem back to heathland. Additionally, the
most recent environmental assessment oblige Wytch Farm a £1.7mln
compensation payment of the oilfield’s psychical presence and environmental
impact related. In terms of fiscal regime, Wytch Farm is subject to 81% tax,
currently comprising of Ring Fence Corporation Tax, Supplementary Charge and
Petroleum Revenue Tax. Oil and gas transportation at Wytch Farm, is regulated
by DTI onshore, liable for the Purbeck-Southampton pipeline, whilst offshore, the
Maritime and Coastguard Agency overlooks ship-to-ship oil transfer (DFC 1999).
Currently, as no renewable energy sources are used onsite, there is no direct
renewable energy policy in place.

Issues affecting the operation

A range off social, environmental, economic and political issues affect the
operation at Wytch Farm, all which need to be integrated in the corporate social
responsibility business model. Table 1 below provides a detailed analysis of these
challenges.

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Challenge/Issue Actions Impact
Environmental Issues
Landscape and Visual Views of most of the sites are limited by landform L
Impact and vegetation - namely tree screens, and the
lowered oilfield design
Ecology and Nature WF located within an ecologically sensitive area, in M/H
Conservation proximity too internationally, nationally and locally
protected nature conservation sites – mitigation
measures already in place and a restoration plan
considers there will be no permanent environmental
effect in terms of wildlife and ecosystem
Climate Change GHG emissions of approximately L
0.1005 million tonnes as carbon dioxide
equivalent (MtC02e) (0.017% of the average annual
UK carbon budget for 2008-2012). Future emission
predicted to decrease
Noise No significant effect for normal operation or L
intermittent tasks such as drilling
Traffic and Access Small changes in traffic flow, adequate public and L
private road network
Air Quality Diesel generators, gas turbine units, waste heat L
recovery and ground flares are sources of NOx
emissions, however the effect considered to be
insignificant
Water, Flood Risk Sites are adequately protected from the risk of M
and Contamination flooding; established measures in place to minimise
the impact on surface and ground waters
contamination
Social
Health and safety of Addressed through internal and external Emergency H
employees Response Plan, 24-hour call out for key staff
Local community Limited residency around the oilfield, no significant L
impact impact
Social investment / Perenco provides community programmes including L
Community and sponsorships, donations, talks and visits. These
stakeholder involve a wide variety of projects and groups,
engagement locally, and across the county
Economic
Employment Currently approximately 107 staff ad 200 M
contractors. Wytch Farm provides high quality job
opportunities and above average salaries for
employees. Staff mostly from outside local area.
Monetary flow to the The total average annual economic output of the
public sector oilfields estimated to £300m
Oil and gas price Hydrocarbons price has a crucial significance in H
Wytch Farm operation
Supply and demand Strongly affect Wytch Farm operations and the H
economic viability
Politic
National energy National policy on energy security, oil and gas
policy production, renewable energy have a high, direct
H
impact on Wytch Farm operations and long-term
future
Table 1. Analysis of challenges and issues affecting operation at Wytch Farm. Impact
rating accordingly: H- High, M – Medium, L- Low. Own impact rating. Based on: Perenco
(2012)

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The most prominent social issue involves the health and safety of employees
during the operation, addressed by an internal Emergency Response Plan.
Environmentally, the most challenging activity throughout Wytch Farm
development is the nature conservation followed by the restoration of heathland.
In regards to the economic and political challenges, oil price, supply and demand
and national energy policy have a strong, direct effect on the economic viability
and the long-term future of Wytch Farm.

Long term future for Wytch Farm

The remaining reserves at Wytch Farm are estimated for around 43m bbl (BBC
2013). The production will continue, as DCC granted the permission the extend
the oilfield life for a further 21 years from 2016, however subject to prevention
of fracking for shale gas and heathland restoration. The decision has been
granted on the basis of national significance, as Wytch Farm reserves represent
1,5% of the remaining proven UK oil deposits. The future development involves
drilling new wells and maintaining existing ones, however the future interest in
exploration and the economic viability are highly dependent on the price of oil.
Economic contribution to the national economy of the Wytch Farm, Wareham and
Kimmeridge sites is estimates at £300m (Perenco 2012), hence the interest in
maintaining stable exploration. Continued development also complies with the
2007 Energy White Paper, ‘supporting and maximising economic production of
fossil fuels in the UK’, whilst gradually transitioning to low carbon economy. The
post carbon future at Wytch Farm is therefore directly related do exhaustion of
existing resources. Establishing new, successful low carbon environment will
require finding an alternative source of economic development and fuel supply.
Therefore, Dorset Coastal Strategy involves using finite resources of oil and gas
responsibly and seeking renewable alternatives to replace them in the long term
(DCC 2013).

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Conclusion
The overall direct and indirect socio-economic benefits of Wytch Farm operations
are seen at a national level. Therefore, as the oilfield matures, it is essential to
ensure maximum recovery of the remaining oil. The energy policy in place, aims
to encourage the highest efficiency, operational safety and limited climate
change impact, throughout the full spectrum of operation at Wytch Farm.
Recognising different social, environmental and economic challenges and
proactively addressing them through CSR, allows Wytch Farm operating to the
highest standards. Sustainable operation at Wytch Farm, enables deriving
tangible benefits from the UK indigenous oil supply. As the country continues
being dependent on fossil fuels as the main source of primary energy, for the
next two decades Wytch Farm will remain supplying high quality, reliable oil and
gas, thereby enabling gradual transition to low carbon economy.

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List of References

BBC (2013) Wytch Farm oil production extended in Dorset [online] available from
< http://www.bbc.co.uk/news/uk-england-dorset-23961621> [29 March
2014]

BP (2003) Asset Portfolio. Wytch Farm [online] available from

<http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_a
ssets/downloads/U/uk_asset_wytch_farm.pdf> [20 March 2014]

BP (2007) Wytch Farm. Environmental Statement 2006 [online] available from

<http://www.bp.com/content/dam/bp/pdf/sustainability/country-
reports/verified_site_report_wytch_farm_2006.pdf> [14 March 2014]

BP (2010) Using Sums not Simulators to Identify the Infill Potential of a Mature
Oilfield [online] available from <http://www.devex-
conference.org/pdf/Presentations_2010/Day2B/DEVEX_2010_Day2_Roo
mB_1610_Presentation_Kenneth%20MacGregor.pdf> [16 March 2014]

Colter, V.S. and Havard, D.J. (1981) ‘The Wytch Farm Oil Field, Dorset’. in
Petroleum Geology of the Continental Shelf of Northwest Europe. ed. by
Illing, L.V. and Hobson, G.D. London: Institute of Petroleum Geology,
494-503

DCC (1998) Towards policy for Dorset’s Coast: Oil and Gas [online] available
from
<http://www.dorsetforyou.com/media/pdf/g/g/Topic_Paper_Oil_&_Gas.p
df> [15 March 2014]

DCC (2013) Agenda Item 4. Wytch Farm, Wareham and Kimmeridge Oilfields –
Extension in the life of the oilfields through the variation of existing
conditions [online] available from
<http://www1.dorsetforyou.com/COUNCIL/commis2013.nsf/AE16B2633A
C77CB480257BD70041D0C2/$file/PLC%20060913%20REP%204%20Wyt
ch%20Farm%20Oilfield-1.0.pdf> [28 March 2014]

DCF (1999) Dorset Coast Strategy. Proposals for policy and action for Dorset’s
coast. [online] available from
<http://www.thegreenblue.org.uk/pdf/z%201074.%20Dorset%20Coast
%20Strategy.pdf> [28 March 2014]

Perenco (2012) Wytch Farm, Wareham and Kimmeridge Oilfields. Environmental

Statement, Non-technical Summary [online] available from
<http://www.dorsetforyou.com/media.jsp?mediaid=184897&filetype=pdf
> [15 March 2014]

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Perenco (2014) Wytch Farm [online] available from < http://www.perenco-
uk.com/about-us/wytch-farm.html> [28 March 2014]

PMMMG (2001) Wytch Farm Field Trip 11.02.01 with Southampton Geology Field
Study Group [online] available from
<http://www.pmmmg.org/wytch_farm_field_trip.htm> [15 March 2014]

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Glossary

AONB Area of Outstanding Natural Beauty

COMAH Control of major accident hazards
CRC Carbon Reduction Commitment
DCC Dorset County Council
DECC Department of Energy and Climate Change
Defra Department for Environment, Food and Rural Affairs
DTI Department of Trade and Industry
ERD Extended Reach Drilling
JNCC Joint Nature Conservation Committee
MGI Miscible Gas Injection
OEU Offshore Environment Unit
OSPAR The Convention for the Protection of the Marine
Environment of the North-East Atlantic
RAMSAR Convention on Wetlands of International Importance
S&D Supply and Demand
SPA Special Protection Area
SSSI Site of Special Scientific Interest
UKCS UK Continental Shelf
WF Wytch Farm

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