UK Demands Drilling Drive in New Licensing Round
The UK Oil and Gas Authority (OGA) launched a 32nd offshore licensing round July 10, as it seeks to revitalise drilling in the North Sea.
The OGA is offering 768 blocks or part-blocks across the main producing areas of the UK Continental Shelf (UKCS). Acreage is on offer in the northern, central, and southern areas of the North Sea, as well as the West of Shetlands.
The OGA said it will make a significant volume of data available to encourage new investment in exploration.
“The ground-breaking data packs have been carefully collated to assist industry in their efforts to stimulate exploration and encourage new opportunities within the mature areas of the UKCS,” the OGA said.
“Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future, therefore maximising economic recovery from the UKCS is vital to meet our energy demands and reduce reliance on imports,” it added.
Activity in the North Sea fell to its lowest in decades last year with just eight wells drilled, according to Wood Mackenzie. However, the consultancy has said it expects “a renaissance” in 2019 as competition and M&A hots up.
Deals such as Petrogas’ $635mn purchase of Total’s North Sea assets, which was announced July 10, are likely to trigger fresh investment in exploration. Chevron and ConocoPhillips also recently sold multi-billion dollar asset packages in the North Sea.
The OGA stressed that it “expects work programmes in mature areas to be substantial with a commitment to rapid execution of operational activities.”
Applications for the blocks will be accepted to November 12. Decisions are expected in the second quarter of 2020. Companies are also invited to propose additional blocks in adjacent areas “where applicants intend to commit to a substantial firm work programme”. The authority also noted that the Faroe Islands has launched a licensing round to coincide with its own offer.