UK licensing round opens new North Sea frontier

March 24, 2017
The UK Oil and Gas Authority’s 29th Offshore Licensing Round was the first in 20 years to focus solely on frontier, underexplored areas and included areas of the Rockall basin, Mid-North Sea High, and part of the East Shetland platform. The round, which closed in October 2016, produced 25 licenses for 111 blocks and partial blocks. OGA awarded bids to 17 companies.

The UK Oil and Gas Authority’s (OGA) 29th Offshore Licensing Round was the first in 20 years to focus solely on frontier, underexplored areas and included areas of the Rockall basin, Mid-North Sea High, and part of the East Shetland platform. The round, which closed in October 2016, produced 25 licenses for 111 blocks and partial blocks. OGA awarded bids to 17 companies (OGJ Online, Nov. 2, 2016).

OGA’s frontier round was preceded by a £20-million investment in new seismic for the Rockall and Mid-North Sea High areas and subsequent release of 40,000 km of new and reprocessed data, according to OGA Chief Executive Officer Andy Samuel.

Statoil ASA was awarded six licenses, five of which it will operate with partner BP PLC in the northern North Sea. Statoil will partner with Esso Exploration on the sixth license, which is west of Scotland in the Rockall basin. Statoil’s awarded acreage includes “both drill-ready prospects and frontier acreage,” said Jez Averty, Statoil senior vice-president for exploration in Norway and the UK.

Statoil stands out as the only operator with firm drill commitments, of which three are planned for 2017.

Azinor Catalyst UK secured two operated licenses covering 10 blocks in the Outer Moray Firth, central North Sea. Awarded on a drill-or-drop basis, one license covers Blocks 14/8, 9, and 10 with Azinor holding 100% interest. Azinor split Blocks 14/13, 14, and 15 with Dyas UK Ltd. with 80% and 20% interest, respectively.

The licenses are contiguous acreage to the operator’s P1989 licence—Blocks 14/11, 12, and 16—which cover the Partridge prospect that the company plans to drill in 2017. Azinor will target Lower Cretaceous prospects. The company believes newly acquired 3D seismic reveals a potentially large Jurassic structure in the region.

Shell UK was awarded two operating licenses with BP as a partner on one. Four UK-based independents including Zennor Petroleum, Alpha Petroleum Resources Ltd., Decipher Energy Ltd., and Nautical Petroleum Ltd. were awarded licenses. TAQA Bratani, North Sea Natural Resources, Simwell Resources, and Centrica were also awarded licenses.

Steam Oil Production Co. was awarded four partial blocks surrounding the Pilot field development—one of the first offshore steam flooding projects. The company believes that successful application of steam flooding in the North Sea could maximize economic recovery from UK Continental Shelf oil fields. The operator’s license contains the Blakeney, Feugh, Dandy, and Crinan discoveries as well as feeder channels that are extensions of Pilot field and the low-to-moderate-risk Bowhead and Titchwell prospects.

Ardent Oil was awarded two licenses in UK Mid-North Sea High area. The first license where the Zechstein Reef trend has been identified includes Blocks 36/24, 25, 37/21, 22, 23, 28b, and 29b. The company also secured a license for Blocks 36/15, 36/20, 37/11, and 37/16. Both licenses are shared with Horizon Energy Partners LLC and Simwell Resources, but no details on working interest has been reported.

Chrysaor and Draupner Energy also were granted operated licenses, but no other information was available at this writing.

Oil & Gas UK’s Upstream Policy Director Mike Tholen welcomed OGA’s announcement, citing the UK authority’s “clear and flexible approach” for its Innovate License offers as enabling three new companies to enter the UK this round.

Tholen said, “This 29th round has the potential to open up new areas of the UKCS, which have been underexplored until now.”

OGA’s 2016 Supplementary Round closed for applications on Mar. 7 and attracted 15 applications for 11 blocks in all. Awards will be announced later this year, OGA said.

OGA’s Andy Samuel said, “While exploration activity has undoubtedly suffered as a result of the difficult market conditions, we are now seeing highly encouraging success rates and finding costs on the UKCS.”

The 30th Offshore Licensing Round will focus on mature areas and will offer an extensive number of prospects and undeveloped discoveries. The 30th Round is likely to be announced during the latter half of this year’s second quarter and will be open for 120, according to OGA.

Contact Tayvis Dunnahoe at [email protected].