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The UK North Sea Is Back With Successful Oil Licensing Round

Offshore rig

The UK Oil and Gas Authority (OGA) awarded on Wednesday 123 licenses over 229 blocks or part-blocks to 61 companies in the 30th Offshore Licensing Round in the UK North Sea, expecting the round to lead very quickly to activity and boost exploration.

The new program commitments include eight firm exploration/appraisal wells, nine firm new-shoot 3D seismic surveys, and 14 licenses progressing straight to field development planning, the OGA said on Wednesday in what it said would be a “transformational” licensing round for the UK North Sea oil industry.

The latest round may help to unlock around a dozen undeveloped discoveries containing a central estimate of 320 million barrels of oil equivalent (boe) of resources in undeveloped oil and gas discoveries that were previously stranded but can now progress through further appraisal to field development, according to the OGA.

“The UKCS is back. Big questions facing the basin have been answered in this round. Exploration is very much alive with lots of prospects generated and new wells to be drilled. The results show a great diversity of active players from super-majors to new entrants, and the hard work promoting undeveloped discoveries is starting to pay off,” Andy Samuel, Chief Executive at the OGA, said.

Major companies and smaller firms won licenses in the 30th round, including BP, Shell, Chevron, ConocoPhillips, Total, Eni, and Equinor (formerly Statoil). Equinor alone picked up 9 new licenses, of which 8 as operator.

Related: OPEC Could “Relax” Production Cuts

Commenting on the round, Deirdre Michie, chief executive at industry association Oil & Gas UK, said:

“We now need these opportunities to be pursued with a sense of urgency to help unlock activity for our hard pressed supply chain and ensure we start to mitigate the potential drop off in production post 2020.”

Kevin Swann, Research Analyst at Wood Mackenzie, told Energy Voice that Big Oil showed a vote of confidence to the UK North Sea. The analyst was excited that 14 licenses could move straight to field development planning.

“The UK is in desperate need of new projects to fill a development pipeline that is all but empty beyond the early 2020s, and 14 new pre-FID projects could go a long way to rectifying that,” Swann told Energy Voice.

By Tsvetana Paraskova for Oilprice.com

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