The UK government has offered 167 production licenses covering 330 offshore blocks in its 27th oil and gas license round and is conducting further studies of 61 blocks near environmentally sensitive areas for which it received offers.
The record 224 applications received for UK Continental Shelf licenses covering 418 blocks has been welcomed as a restoration of oil and gas industry confidence, which was shattered early last year when the government increased the rate of a supplemental tax on income from oil and gas production.
Since then, the government has added tax incentives to encourage development of challenging oil and gas fields and offered assurances about the recoverability of costs associated with decommissioning offshore platforms.
The number of applications received in the 27th license round exceeded the previous record by 37, which was set in the 26th round held in 2010.
Welcoming the new licensing results, Mike Tholen, Oil & Gas UK economics and commercial director, pointed out that last year’s exploration offshore the UK fell to its lowest rate “for many decades.”
He said, “While the measure announced by the government in the summer to improve the economics of small fields should help, it is only one of the factors influencing exploration.”
He said Oil & Gas UK is working with the Department of Energy and Climate Change to consider “the levers that could be pulled to boost new drilling.”