The British Oil and Gas Authority has announced a fresh bidding round for 813 oil and gas blocks in the North Sea. This is the 30th offshore licensing round for local hydrocarbon deposits and it will focus on mature fields, the authority said in a press release.
The total area that will be tendered stands at 114,426 sq km or over 28 million acres, and includes prospects as well as discoveries that have remained undeveloped.
Bids will be accepted until November 21 and the blocks will be awarded in the second quarter of 2018, OGA said, adding that the 30th round follows an auction organized earlier this month, in which 10 bidders won 12 exploration licenses in the British continental shelf.
In March this year, in the 29th licensing round, the authority awarded 25 exploration licenses for 111 blocks and part blocks to 17 companies. That round focused on frontier, or untapped, areas in the British sector of the North Sea.
As Reuters reported at the time, the 29th bidding round attracted meager interest from investors. In fact, bids were the fewest in the last 14 years due to the high production costs for oil and gas exploration in the North Sea. In that round, the greatest number of licenses went to Big Oil players with an established presence in the North Sea, such as Shell, Statoil, and BP.
Related: Energy Equities Hit Hard By Unstable Oil Prices
The OGA has been eager to stimulate investor interest to revive Britain’s upstream sector, burdened not just by the recent oil price crash but also by mounting decommissioning costs for mature fields in the North Sea.
As part of efforts to motivate bidders, OGA in March announced a 90-percent cut in rental fees. At the time, the authority also said the 30th licensing round, initially planned for May or June, would be the “most significant” in decades, Reuters wrote, allowing bidders to pick licenses that had been relinquished since the last tender for mature blocks, which took place three years ago.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.