Feasibility Report of a Deep Geothermal Single Well, Aberdeen Exhibition and Conference Centre

Oil and Gas Industry Crossover

Aberdeen is Europe's Oil & Gas capital and is home to an extensive oil and gas supply chain. The technical and commercial skills required to develop a deep geothermal project are very much aligned with those needed to develop an oil and gas exploration project and it is considered that the presence of these resources in Aberdeen offers a good opportunity for the crossover and transition of skills. We also highlight that in the current economic climate, with a declining price for crude oil and reduction in North Sea exploration budgets, that an opportunity for diversification and transfer of skills to geothermal exploration is now timely and opportune.

This section provides an outline on key areas where potential synergies exist and makes the case for Scotland to become a 'geothermal supply chain' leader.

Existing Technical & Commercial Resources

Engineering and Geological Skills

We believe that the largest and most significant crossover potential between the oil & gas industry and low carbon deep geothermal energy is from the scientific and engineering disciplines aligned to oil & gas that are established in Aberdeen. The 2013 SKM Report on UK geothermal^[50] highlighted that "the crossover potential from oil and gas into geothermal offers a strong opportunity in fulfilling Scottish Enterprise's aim to encourage the transition of skills, technology and knowledge into low carbon energy sources". Aberdeen is home to many specialist reservoir, petroleum and geological engineers within both operator and service companies who would be able to apply existing technical skills directly to the modelling, design and construction of deep geothermal wells. Geothermal technology could provide an additional employment opportunity for highly skilled engineers and scientists in the Aberdeen area. In addition, as geothermal development is so closely related to oil & gas exploration, the requirement for re-training the skill pool would be at a minimum compared to the level of investment needed to re-train for a different industry.

Techniques, Equipment & Supply Chain

The supply chain for the delivery of any deep well is complex and specialised and requires both specialised personnel (reservoir modelling, geophysical testing, well design, well examiners, mud-loggers, drilling supervisors) and equipment (drilling rigs, casings, drilling consumables and cementing). Aberdeen already has all of these in place.

As part of the 2013 Atkins^[51] review of geothermal energy a questionnaire was issued to a range of stakeholders (including the oil and gas industry) which included questions aligned to synergies between deep geothermal development and oil and gas technology developments. The responses to this questionnaire (from institutions including Durham University and Baker Hughes Reservoir Engineering) highlighted that there could be key contributions to deep geothermal development from existing technical areas including drilling, completions, water conditioning, fluid processing and pump systems in addition to the potential for 3D reservoir modelling technologies to be adapted for 3D modelling of thermal resources.

The presence of existing technical and commercial skills and equipment within the oil and gas industry in Aberdeen places Scotland in the position of becoming a leader and first mover to deliver technical expertise to deep geothermal projects in the UK, Europe and beyond. The SKM study^[3] stated that there are certain areas (particularly in technical and engineering) where there would be a potential for the development of a "Scottish Geothermal Supply Chain" where Scotland would be the main driver to this new industry on the back of existing skills from the oil and gas industry. The potential opportunities for supply chain crossover from the established oil and gas industry to a new deep geothermal industry has been acknowledged from discussions with specialist suppliers to UK offshore and onshore oilfield marketplace. Aberdeen's North Sea Field's Hartmann, who are international suppliers of valves and wellheads are keen to demonstrate how this potential new diversification opportunity can complement existing business. They have indicated a strong interest in exploring the potential diversification opportunity that a new industry could bring to its core business. Hartmann agree that a deep geothermal well located at the site of the new Aberdeen Exhibition and Conference Centre (AECC) "would provide one of the best showcasing opportunities to the wider oil industry to permit further awareness and understanding of the crossover and supply chain opportunities to be developed further."

With an oil price of between $32 and $35 per barrel at the time of writing the report, we believe that there could not be a better time to develop a deep geothermal industry drawing on the existing skills and supply chains based in Aberdeen.

AECC as a Deep Geothermal Demonstrator Site

The selection of the AECC as a deep geothermal demonstrator site will give the oil and gas industries already based in Aberdeen the greatest opportunity to observe and interact with geothermal technology and make the most of the synergies that exist and the crossover opportunities that are on offer. The Aberdeen Exhibition and Conference Centre (AECC) will host the Offshore Europe Conference & Exhibition, the Annual Oil & Gas Industry Conference and a host of Oil & Gas Industry trade events. Therefore, locating the first deep geothermal demonstrator at the AECC site offers not only the Aberdeen Oil & Gas Industry but the worldwide Oil & Gas industry the opportunity to view deep geothermal technology in action and understand the investment and supply chain opportunities that it offers.