UK awards 150 licenses in 24th licensing round

The UK's Department for Trade and Industry (DTI) has named Maersk Oil North Sea UK Ltd., EnCore Oil PLC, and Ithaca Energy recipients of exploration and production licenses in the UK North Sea under the nation's 24th licensing round.

Uchenna Izundu
International Editor

LONDON, Feb. 1 -- The UK's Department for Trade and Industry (DTI) has named Maersk Oil North Sea UK Ltd., EnCore Oil PLC, and Ithaca Energy recipients of exploration and production licenses in the UK North Sea under the nation's 24th licensing round.

DTI had invited 104 companies, 17 of which are new, to the UK continental shelf, to develop 246 blocks—continuing the record number of licences issued last year. DTI awarded 150 exploration and production licenses to the winners.

EnCore won 7 licenses covering 12 blocks and part blocks in the Central North Sea, East Irish Sea, Northern North Sea, and Southern North Sea. It expects to operate three of the licenses.

On Blocks 28/9 and 28/10b (split), the operator, Oilexco North Sea Ltd. will drill a well within 12 months, paying a small part of EnCore's well costs. EnCore will operate Block 14/30a and could drill a well, depending on what it learns from the nearby 14/30a-2 heavy oil discovery. On Blocks 113/29c and 113/30, Nautical Petroleum PLC and EnCore have a "drill or drop" option on a sizeable offshore prospect that could be drilled from an onshore location.

Ithaca Energy secured 7 blocks, including Blocks 14/17(part) and 14/18c, which are adjacent to its Athena project in the Outer Moray Firth area. Block 14/18c contains a satellite discovery previously made by well 14/18-1, Athena East (formerly known as Bordeaux) that tested 1,250 b/d of oil in Upper Jurassic.

"A water contact has not yet been established, which leads management to believe the project has upside potential. Block 14/18c may also contain upside with the extension of the Athena Lower Cretaceous discovery tested by well 14/18-15 drilled by Ithaca in 2006. Block 14/17(part) is immediately west and on trend with Athena," Ithaca said.

Maersk Oil was granted 15 licenses and will work with Eni SPA, Noble Energy Inc., BG Group, Nippon Oil Co., Chevron Corp., and Talisman Energy UK Group in different consortiums for different blocks.

Alistair Darling, secretary of state for DTI said: "There are potentially more than 20 billion bbl of oil and gas still available to be produced, which is good news for industry, our economy, and energy supply."

However, DTI has delayed offering 4 blocks in Cardigan Bay (106/30, 107/21, and 107/22) and the Moray Firth to potential winners because it has received environmental challenges about them as habitat areas for dolphins. DTI will carry out further checks before it takes any decision on them.

Results from the 24th licensing round have been delayed by over 3 months following environmental checks against some of the applications to comply with European environmental directives.

In 2006 at least 500,000 bbl were discovered in the North Sea, which the government said was the highest number of finds since 2001. "Around 40% of exploration wells have found potentially commercial oil and gas accumulations," it added.

Contact Uchenna Izundu at uchennai@pennwell.com.

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