Oil and gas operators apply for 164 blocks in UK’s latest offshore licensing round

The United Kingdom’s latest offshore licensing round has attracted 36 applications covering 164 blocks in frontier areas of the UK Continental Shelf (UKCS), demonstrating that interest in UK offshore licensing opportunities has increased. 

The UK government called for applications for licenses in the 31st Offshore Licensing Round on July 10, 2018, and the round closed on Wednesday, November 7.

A strong and diverse set of applications were received from 35 companies ranging from multinationals to microbusinesses, the UK’s oil and gas regulator, the Oil and Gas Authority (OGA), said on Wednesday.

The 31st Licensing Round offered opportunities to acquire acreage across the UKCS’s extensive frontier areas, including the Atlantic Margin, East Shetland Platform, Mid North Sea High, and the English Channel, with an aggregate area exceeding 370,000 km2.

The regulator also said it will now start its technical evaluation of applications and intends to offer awards to successful applicants as early as possible during 2Q 2019.

‘Increased interest’ 

Dr Nick Richardson, Head of Exploration and New Ventures at the OGA, said: “This is an encouraging set of applications, demonstrating that interest in UK offshore licensing opportunities has increased since the 29th frontier round held in 2016, with an almost 50% increase in the number of blocks applied for. The OGA has received applications on some blocks on the East Shetland Platform which have never been previously licensed, underlining the positive impact of ongoing Government-Funded data initiatives.”

Concerns over low drilling activity

Richardson added: “The recent publication by the OGA of a comprehensive re-evaluation of the UKCS’s Yet-to-Find potential points towards an additional exploration resource base of 4.1 billion barrels of oil equivalent (Bboe) in prospects and leads and 11.2 Bboe in plays, largely in frontier areas, with a bias towards gas-rich opportunities.

“Whilst the UKCS offers a rich and attractive set of exploration and field development opportunities, the OGA continues to be concerned by low levels of drilling activity. We are encouraging industry to step up its efforts to explore for new resources, providing enhanced security of domestic supply in the future.”

Attention will now turn to the 31st Supplementary Round in the Greater Buchan Area, scheduled to be launched in 1Q 2019, which will provide an opportunity to develop and explore for a cluster of opportunities in a prime area of the Outer Moray Firth. To support this effort, the OGA will be releasing a package of supporting data, and is encouraging companies to partner up and collaborate in an Area Plan approach to maximize value from the estimated 150-300 million barrels of oil equivalent (MMboe) within this area.

The OGA has a long-term plan to offer regular licensing opportunities to the industry with annual rounds, alternating between mature and frontier areas. The next mature licensing round is scheduled to be launched in mid-2019 and will be supported by the UK’s flexible licensing regime.