Targeting frontier areas in the North Sea
Latest license round set to unlock stranded reserves
When the UK's Oil and Gas Authority (OGA) launched the 30th Offshore Licensing Round in July 2017, the oil price was still below $50 a barrel and corporate spending was restricted.
Against that background, the OGA focused on acreage close to existing fields that offered the prospect of relatively low-cost development. Drillers might feel these were worth another look in light of recent discoveries and more detailed geophysical data. The OGA offered 813 blocks or part-blocks, in mature areas of the UK Continental Shelf (UKCS) covering 114,426 sq km.
The round resulted in the awarding in May 2018 of 123 licences over 229 blocks or part-blocks to 61 companies ranging from supermajors to new entrants to the UKCS. The awarded acreage covered 26,659 sq km, which represented a 50% increase in UK offshore licenced acreage.
The OGA hopes the round may help unlock around a dozen undeveloped but previously stranded discoveries containing a central estimate of 320m barrels of oil equivalent. It says exploration resulting from the licensing round will target prospective resources estimated by the industry to total some 3.6bn boe.
Among the awards, there were eight firm commitments to drill exploration or appraisal wells and nine commitments to shoot new 3D seismic surveys, as well as 14 licences—second-term licences—set to progress straight to field-development planning.
As Deirdre Michie, chief executive of 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."
The UK's next licensing round, due to be launched in the coming weeks, targeting "high-impact exploration opportunities" in under-explored and frontier areas of the UKCS. This round looks likely to be of more interest to larger firms with deeper pockets.
OGA has released data from a government-funded programme carried out in 2016, covering almost 19,000 sq km of new broadband seismic data, plus some 23,000 km of reprocessed legacy seismic.