More than 40 new exploration licenses have been issued in the UK North Sea by the newly formed industry regulator Oil and Gas Authority (OGA).
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Image from Dolphin Geophysical. |
The 41 new licenses are the remaining winners of the 28th Offshore Licensing Round, which saw 134 licenses confirmed November 2014.
The total number of licenses awarded is 175, covering 353 blocks, making it one of the largest rounds since the first licensing round took place in 1964. Majors including Statoil and Total alongside larger independents Nexen and EnQuest had the largest haul of licenses, with a large number of smaller, new entrants also scooping awards.
The challenge will be translating the licenses into drilling activity. Indeed, OGA CEO Andy Samuel said that awarding licenses was just a start and that industry, government and the OGA needed to work together to revitalize drilling activity in the basin, which has been at its lowest levels since the early 1970s.
“The UK Continental Shelf remains a world-class hydrocarbon province where significant resources and economic value remain to be realized. The good level of interest in the 28th Round highlights the continued attractiveness of the UK’s oil and gas resources," Samuel said. “Licenses are however just a start and industry, government and the OGA now need to work together to revitalize exploration activity across the basin and convert licenses into successful exploration wells.”
“We are determined to make the most of our North Sea resources to provide secure, reliable energy for hardworking families and businesses and reduce our reliance on volatile foreign imports," Andrea Leadsom, UK Energy Minister said. “We are backing our oil and gas industry which supports hundreds of thousands of jobs across the UK. The 28th offshore licensing round comes after the Government announced a major package of support in March to encourage £4 billion of additional investment in the North Sea which will prolong the life of this vital industry.”
Oonagh Werngren, Oil & Gas UK’s operations director, commented: “Today’s announcement, of the second half of the 28th offshore Licence Round on the UKCS is very welcome. The new licences are in a range of locations from mature, well-explored basins, to frontier acreage in the Rockall Trough and St George’s Channel Basin to the west of the UK, with licences awarded to both experienced operators and relatively new players. Of concern, however, is that only one firm well and five new 3D seismic programmes appear to have been bid on the acreage, with the majority of licences being awarded on the basis of reprocessing or obtaining old 2D and 3D data.
“The oil and gas industry is facing a number of major challenges, including the need to stimulate exploration, so today’s announcement, in conjunction with the new Government-funded 2D seismic programmes in the Rockall Trough and the mid North Sea, provides welcome stimulus for the basin and demonstrates that explorers still consider the UKCS prospective territory for the future.”
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