Research from NEL, the flow measurement R&D specialist, reveals that the North Sea oil and gas sector could be misreporting over $1093 million (£700 million) per year.

This is due to its reliance on the American AGA-8 standard to measure gas composition of North Sea fields.

The AGA-8 (American Gas Association) method forms an integral part of the global oil and gas industry’s measurement infrastructure, and is the basis for all fluid property calculations related to natural gas supply. However, NEL is now increasingly seeing significant mis-measurement of gas production as more North Sea fields are falling outside the pipeline quality gas specifications, required to obtain the 0.1% uncertainty of the the AGA-8 method.

By using established alternative methods and calculation models, NEL has identified measurement errors of several percent, which is ten times the uncertainty that would be identified using the AGA-8 method. If this was to affect the bulk of the maturing North Sea fields, it could amount to a financial exposure of over $1093 million (£700 million) per annum. This poses a major problem for the maturing oil and gas sector worldwide, creating serious financial exposure, both for allocation measurement between operators using shared pipelines and for fiscal taxation reporting.

Lynn Hunter, Group Manager at NEL, said, “This is something that could affect the oil and gas industry worldwide, as mis-measurement is due to both the compositional changes from ageing fields, and complex fields exhibiting non-ideal gas compositions. Falling outside the scope of the AGA-8 standard could therefore be costing the oil & gas industry millions of pounds every year, which is why NEL has been addressing its limitations by using alternative calculation methods to give operators more confidence in their production figures.”

Source: www.worldoil.com

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