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OGA awards 115 licences in 32nd round

UKCS continues to see strong appetite from operators

The UK’s Oil & Gas Authority (OGA), which has responsibility for the country’s upstream sector, offered for award on Thursday 115 licences across 259 blocks or part-blocks to 65 companies in its 32nd offshore licensing round, which was launched in July 2019. The results “demonstrat[e] the strong interest in the licensing round and appetite for exploration in the UK North Sea”, says one of the successful bidders, UK independent Talon Energy

The round offered blocks in mature producing areas close to existing infrastructure and were awarded on flexible Innovate licences, which allow applicants to define a licence duration and phasing to enable optimal work programmes.

Near-field developments

Unsurprisingly, successful recipients stressed their new licences’ fit with existing operations. UK independent Premier Oil was awarded three licences—two directly adjacent to its Tolmount field development area in the Southern North Sea (SNS) and a third next to its operated Catcher Area fields in the Central North Sea (CNS).

Premier acquired 3D seismic data across the Greater Tolmount Area in 2019 that included a significant proportion of its two new SNS awards and—having received the final processed data from that survey in Q2 this year—is maturing a number of leads and prospects identified on the new blocks. In a success case, any viable discoveries could be developed via the Tolmount infrastructure. Its new CNS block contains the Cougar and Rapide prospects, which are being evaluated as potential tie-backs to the Catcher Area facilities.

"[The results] demonstrat[e] the strong interest in the licensing round and appetite for exploration in the UK North Sea” Talon Energy

Fellow UK indie IOG received four new blocks, all adjacent to its existing assets and within range of its Thames Pipeline, “offering clear potential for accretive incremental gas hub investments”. Two of its blocks were in a joint venture with Berkshire Hathaway subsidiary CalEnergy, one lying 5km from its Elland find and containing the Viper gas discovery, with initial management-estimated mid-case recoverable gas resources of 46bn ft³ (1.30bn m³), and the other containing the Sinope South gas discovery, with initial management-estimated mid-case recoverable gas resources of 35bn ft³.

IOG was also offered full ownership of a further two licences lying between its Blythe and Harvey assets and containing the Allerdale, Driftwood and Bradfield prospects and a possible northwest extension of the Redwell field.

“Leveraging its existing and planned production and export infrastructure in the area of its gas developments is an important part of IOG’s strategy, and these licence awards represent progress here, potentially helping support further development phases beyond the current project,” says Daniel Slater, oil and gas research director at London brokerage Arden.

Another peer, Deltic Energy, was awarded six licences, four solely operated and two on a 30pc/70pc basis with Shell. In the SNS, one of its licences is contiguous with its existing P2252 licence and is thought to contain potential extensions of the Pensacola Reef prospect. A second is immediately north of the proposed Pegasus development being finalised by operator Spirit Energy.

Its three other SNS blocks are located immediately to the south and southeast of the Breagh gas field. Its final award is in the CNS.

Moving fast

The UK’s Corallian Energy was awarded three blocks, one of which contains the West of Shetland (WoS) Victory gas discovery which it estimates contains 2C contingent recoverable gas resources of 154bn ft³. It intends to move Victory directly into a development stage and, subject to successful third-party access negotiations, develop it via a subsea tieback to the Total-operated Greater Laggan Area (GLA) gas pipeline, which has an access tee located just 18km south of the Victory discovery.

Corallian aims to submit a field development plan for the project to the OGA within 18 months of the award of the licence. First gas from the project is anticipated in 2025.

A second WoS licence includes both the Laxford gas discovery—24km northwest of Victory—and the Scourie prospect. Corallian estimates recoverable reserves at the former to amount to 81bn ft³ of gas and 1mn bl of condensate, and the latter 107bn ft³ of gas and 1mn bl of condensate. Laxford could also be developed as a tieback to the GLA pipeline, either via Victory or the Glenlivet field.

Its third new licence is in the Northern North Sea and sits adjacent to an existing Corallian holding. The block contains the 10-20mn bl Oulton oil discovery and the 37mn bl Oulton West prospect, as well as a 22bn ft³ gas prospect.

Malaysia’s Anasuria Hibiscus enjoyed triple success, again in close proximity to existing assets. One of its new blocks contains the Teal West discovery, which is contiguous to the Teal field, is located c.4km from the Teal manifold of its Anasuria Cluster and is a potential tieback candidate to the Anasuria floating production and offloading facility.

Its second award is contiguous with the Cook field, in which it already holds a 19.3pc stake. And its third is located 8km from its operated Marigold field and contains the Kildrummy discovery, which may become a potential tieback candidate to infrastructure implemented as part of the Marigold development.

UK independent Spark Exploration was awarded a single new licence, on the WoS’ Rona Ridge between two existing Spark licences. The new acreage “will provide additional exposure to an attractive set of regionally proven plays”, says the firm, which will work alongside WoS specialist Siccar Point Energy.

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