Illustration; Source: North Sea Transition Authority (NSTA)

With third and final license batch, 82 awards put forward so far in UK’s 33rd oil & gas round

In the most recent phase of Britain’s 33rd oil and gas licensing round, the UK regulator, North Sea Transition Authority (NSTA), has offered 31 more licenses made up of 88 blocks/part blocks in the Central North Sea, East Irish Sea, and the Southern North Sea.

Illustration; Source: North Sea Transition Authority (NSTA)

According to the NSTA, the latest tranche comprises 31 licenses, 29 new ones and two merges while a small number of remaining applications are still under consideration, thus, a few more licenses may be offered at some later date.

Regarding these 29 new licenses, 23 are initial term phase A, meaning a period for carrying out geotechnical studies and geophysical data reprocessing, or phase B, denoting a period for undertaking seismic surveys and acquiring other geophysical data. Two of these licenses will be initial term phase C (firm wells), which refers to drilling, and the remaining four will go straight to second term, so they could theoretically go into production more quickly.

Furthermore, the 33rd round attracted 115 bids in total from 76 companies across 257 blocks and part-blocks, resulting in 82 offers to 50 companies. The licenses offered in the round are expected to add an estimated 600 million barrels of oil equivalent (MMboe) up to 2060, or 545 by 2050. 

The 33rd oil and gas licensing round was opened on October 7, 2022, offering acreage across the North Sea – the West of Shetland, Northern North Sea, Central North Sea, Southern North Sea, and East Irish Sea – including four priority areas with known hydrocarbons. The first batch of 27 awards was handed out in October 2023, followed by a second batch of 24 licenses in February 2024.

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Following discussions with partners in The Crown Estate and Crown Estate Scotland, the UK regulator says that it has introduced a new clause for overlapping oil and gas licenses and wind leases for the first time to serve as the main commercial mechanism for resolving licenses’ spatial overlaps and support the industries’ co-existence. As the NSTA considers the North Sea an important resource for energy security and net zero delivery, it expects sectors to collaborate to enable the co-existence of those systems.

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Europa Oil & Gas shoots down license offer opportunity

While it applied for a license in the 33rd round, the UK-headquartered and AIM-listed Europa Oil & Gas has decided it no longer wants to be considered an applicant due to changes in Britain’s fiscal ecosystem. This comes after the NSTA’s proposal for the company to share the license with another firm that applied for the same one. According to the oil and gas player, it will neither accept this offer, nor the regulator’s potential offer of the entire license, enabling it to become the sole owner.

The decision to apply for a license was made following analyses of available subsurface data, monetization options, and subsequent economics of developing resources within the license made in 4Q 2022. However, various operational and financial conditions have changed in the meantime, thus, the company believes that its resources would be put to better use on its existing assets and wants to look for new opportunities within its main areas of operation.

One of these core assets is the planned development of a gas prospect on the Irish offshore license FEL 4/19. Europa is determined to move forward with it after securing an extension to January 31, 2026, followed by a recently published third-party report suggesting that the gas discovery at this prospect could help curb Ireland’s carbon footprint by lowering emissions from imports.

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Will Holland, Chief Executive Officer of Europa, commented: “I’d like to thank the NSTA for suggesting this marriage and giving Europa the opportunity to participate in the licence that we applied for in the 33rd Round. Since making the application we have acquired an interest in the EG-08 licence in Equatorial Guinea, which we believe is very material.

Late last year, the oil and gas player acquired a 42.9% equity interest in Antler Global which holds an 80% working interest in the EG-08 production sharing contract (PSC) offshore Equatorial Guinea, with the national oil company Guinea Ecuatorial de Petroleos (GEPetrol) holding the remaining 20%.

“Given the size of the company and our limited resources it is essential that we focus on where we see the best risk/reward proposition that can generate significant value for our shareholders. Any new asset needs to be considered carefully against other opportunities that are under evaluation to ensure that we are deploying our capital on assets that have the best potential of returning value to our shareholders,” added Holland.