UK grants 171 North Sea licenses in latest round
The UK has awarded 171 licenses in the UK North Sea in its 25th licensing round. The area licensed is thought to contain as much as 20 billion bbl of recoverable oil.
LONDON, Nov. 13 -- The UK has awarded 171 licenses in the UK North Sea in its 25th licensing round. The area licensed is thought to contain as much as 20 billion bbl of recoverable oil. License-holders held interests ranging from 25-100%.
Maersk Oil North Sea UK Ltd, Valiant Petroleum PLC, and Lundin Petroleum AS are three of the winners that emerged.
Maersk Oil, Copenhagen, picked up four blocks: Block 15/19c; Block 22/29c, Block 29/10b, and Block 204/18. It will drill two exploration wells on the southern section of Block 15/19c, which was split. It holds a 100% interest in the lease.
Block 22/29c was also split. Maersk will operate the license and hold 75%, working with partner Dana Petroleum PLC 25% to drill one exploration well and reprocess seismic data.
Maersk Oil also will operate Block 29/10b and hold a 50% stake. Its partner is Ithaca Energy (UK) Ltd. Both plan to reprocess 3D seismic.
Maersk Oil acquired the southern part of Block 204/18, where it holds 100% and will operate the license. It is obliged to shoot a line of electromagnetic data, reprocess 3D seismic, and drill one well, contingent on positive results of the work program.
UK firm Valiant Petroleum was granted eight traditional licenses, on which it will serve as operator in and around its core northern North Sea, West of Shetland, and Central North Sea acreage. Valiant has committed to drill four firm exploration wells before yearend 2012.
Swedish independent Lundin Petroleum scooped six exploration licenses, of which five are operated licenses in the Central and North Sea basins.
"The awards cover 14 blocks or part-blocks. Several prospects identified have seismic anomalies consistent with hydrocarbon accumulations in the region," Lundin said.
257 blocks offered
Energy minister Mike O'Brien said it was crucial that the country maximize its indigenous oil and gas production, and it is offering 257 blocks.
"While we work to develop low-carbon sources of energy, oil and gas will continue to be an important source of energy for the UK," he added.
This year the UK offered 124 traditional licenses compared with 79 in the last licensing round. It granted 6 frontier licenses, the same as last time; and 41 promote licenses, down from 65.
The Department for Energy and Climate Change will carry out a stringent environmental check on 46 of the blocks in protected areas. "A decision on whether to grant licenses for these blocks will be subject to the results of the environmental assessments," it said.
Oil & Gas UK, the country's trade association, welcomed the announcement, but warned that it was important to convert these licenses into exploration, development, and production activity. As oil prices fall, companies are becoming cautious about proceeding with their challenging projects, which are very expensive.
"In the current economic climate of reduced access to capital, oil and gas companies operating in the UK must focus on sustaining effective investment so the maximum benefit is derived from these licenses," said Paul Dymond, Oil & Gas UK's operations director.
Alistair Birnie, chief executive of Subsea UK, the industry body, said: "With the remaining reserves becoming increasingly complex to access, technology and particularly subsea technology must be at the forefront. The UK subsea sector leads the way in the development of subsea skills, expertise and technology, and today's announcement is good news for our sector."
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