North Sea oil, gas production receives “significant boost” with 27 new offered licenses

(WO) – North Sea oil and gas production has received a significant boost with the offer of 27 new licenses in areas prioritized because they have 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 the 258 Blocks have been through an initial Habitat Regulation Assessment (HRA), and the blocks being awarded on Oct. 30 have been identified as not requiring further assessment.

The 33rd Oil and Gas Licensing Round was launched on Oct. 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 Jan 12, 203. This was the highest participation since the introduction of the Innovate Licenses in 29th Round in 2016/17.

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 is around five years.

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

There are currently 284 offshore fields in production in the UK North Sea and an estimated 5.25 Boe in total projected production to 2050.

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

Other marine users are taken into consideration throughout project lifecycles, including at license award and stewardship process stages. Developing a site typically requires additional consents, including from the Department of Energy Security and Net Zero, and the NSTA works closely with government, regulators, and other bodies such as The Crown Estate and Crown Estate Scotland to manage this process and to identify and mitigate as appropriate important spatial co-location considerations.

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 licenses 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, “These new licenses 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.