OEUK endorses North Sea oil and gas operators seeking licenses to support the future of UK energy

(WO) — The North Sea Transition Authority’s announcement that it has received 115 bids for new oil and gas exploration licenses shows how UK offshore energy operators are doing their best to support the nation’s energy future, Offshore Energies UK (OEUK) said on Jan. 16.

The 33rd offshore oil and gas licensing round closed on Jan. 12. The 115 bids were spread across 258 blocks and part-blocks and were submitted by 76 companies, according to NSTA data.

This compares with the NSTA’s 32nd licensing round in 2019 which received 104 applications covering 245 blocks and part-blocks. In 2019 a total of 768 blocks and part-blocks were offered, compared with 932 this year.

The latest round included four priority areas with known oil and gas reserves, but many others are less certain.

OEUK said it was important to note that although the headline number of applications was positive, many details remained unclear – in particular, what the license applications were actually for. This is because licenses can be issued for exploration, production, or other purposes.

The NSTA will spend the next three months analyzing the applications and announce the awarding of licenses from April when more details will become clear.

Oil and gas is essential to the UK’s energy security. OEUK’s Economic Report 2022 described how the UK gets about 75% of its total energy from these fuels and is already partially reliant on imports. In 2021, for example, the UK had to import just over 60% of its gas. Across the UK about 24 million homes (85% of the total) rely on gas boilers for heat.

The UK also relies on gas for its power supplies with gas-fired power stations producing 42% of the nation’s electricity. Similarly, oil powers most of the UK’s transport with 32 million vehicles running on petrol and diesel.

Across the UK, the offshore industry also supports 200,000 jobs.

Mark Wilson, director of HSE and operations at OEUK said, “These license applications could potentially help the nation safeguard its supplies of oil and gas and support the UK during its transition to low-carbon energy. These applications reflect long-term thinking by companies which will invest many millions of pounds in the North Sea to search for new reserves, with no guarantee of success.

“The aim of issuing these new licenses is simply to support the UK while it builds the infrastructure needed for a low-carbon future.  As some of our older reserves are becoming depleted, new finds will help us replace lost production of oil and gas and positively contribute to UK’s energy transition and energy security.  This is why new licenses are so important.

“All new developments will have lower emissions than older fields, helping the industry meet its target of halving emissions by 2030 and net zero emissions by 2050. Our industry has already reduced the emissions from UK oil and gas production by 20% since 2018. New developments will be subject to checks by the industry regulators to ensure that the production is consistent with our binding commitments on climate change.”