UK Offers 27 New North Sea Licenses

Credit: Bildagentur-o/AdobeStock
Credit: Bildagentur-o/AdobeStock

The UK on Monday offered 27 new licenses in North Sea areas with the potential to go into production more quickly than others.

In addition to the 27 licenses, six more blocks, which were also ready to be offered, have been merged into five existing licenses.

"All of the 258 blocks that have been applied for have been through the initial Habitat Regulation Assessment (HRA) and the blocks being awarded today have been identified as not requiring further assessment," the UK offshore regulator North Sea Transition Authority said.

These licenses in the Central and Northern North Sea, and West of Shetland were awarded first to let operators press ahead with their plans to explore and develop oil and gas resources. In recent years, the average time from license award to production has been around five years.

The 33rd Oil and Gas Licensing Round was launched on October 7, 2022, with 931 blocks and part-blocks made available for application. 

In total, the North Sea Transition Authority (NSTA) received 115 applications from 76 companies for 258 blocks/part-blocks when the application window closed on January 12, 2023. This was the highest participation since the introduction of the Innovate Licences in 29th Round in 2016/17.

"Today’s announcement is part of the NSTA’s wider efforts to support the UK’s energy security options, which includes the licensing of offshore gas stores and engagement with industry on opportunities to reopen closed wells," the NSTA said.

There are currently 284 offshore fields in production in the UK North Sea and an estimated 5.25bn boe in total projected production to 2050, the NSTA said.

"Oil and gas currently contribute around three-quarters of domestic energy needs, and official forecasts show that, as we transition, they will continue to play a role in our energy mix for decades to come," NSTA said.

Stuart Payne, NSTA Chief Executive, said: "Ensuring that the UK has broad options for energy security is at the heart of our work and these licences were awarded in the expectation that the licensees will get down to work immediately. The NSTA will work with the licensees to make sure that where production can be achieved it happens as quickly as possible.”

Energy Security Secretary Claire Coutinho said: "As recognised by the independent Climate Change Committee - we’ll continue to need oil and gas over the coming decades as we deliver net zero. “It’s common sense to reduce our reliance on foreign imports and use our own supply – it’s better for our economy, the environment and our energy security.

“These new licences are a welcome boost for the UK industry, which already supports around 200,000 jobs and contributes £16 billion to the economy each year – while advancing our transition to low-carbon technologies, on which our future prosperity depends.”

A recommendation for the remaining 203 blocks will be made once the Habitat Regulation Assessment Further Appropriate Assessment process has been completed, the NSTA said.

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