U.K. AWARDS 107 OFFSHORE EXPLORATION BLOCKS

Britain has awarded 107 blocks for exploration in the North Sea, Irish Sea, and English Channel in its 12th licensing round. And in the first frontier round, 66 blocks were awarded in the Atlantic Ocean west of the Shetland Islands as part of six groups of acreage. Sixty-nine companies were involved in groups awarded licenses in the 12th round, while six groups that acquired frontier blocks were made up of 17 companies.

June 3, 1991

4 min read

Britain has awarded 107 blocks for exploration in the North Sea, Irish Sea, and English Channel in its 12th licensing round.

And in the first frontier round, 66 blocks were awarded in the Atlantic Ocean west of the Shetland Islands as part of six groups of acreage.

Sixty-nine companies were involved in groups awarded licenses in the 12th round, while six groups that acquired frontier blocks were made up of 17 companies.

As a result of the round, companies have submitted work programs that call for drilling 167 wells, including the first horizontal wildcat in the U.K. North Sea. The Department of Energy said the horizontal well will test a feature discovered some time ago but never satisfactorily explained.

Companies also committed to drill a number of very deep, high pressure wells in the Central North Sea.

Work programs include 21 three dimensional seismic surveys, mostly in the Moray Firth and Central North Sea areas.

DOE said operators have come up with some innovative ideas about how and where hydrocarbons might be trapped.

About one third of the 167 wells will test unconventional targets, more than half of them in the northern North Sea, Moray Firth, and Central North Sea, indicating a switch from drilling more obvious to less obvious prospects.

NEW BASINS

Two small basins will be drilled for the first time as a result of the round.

Hamilton Bros. group will drill two blocks in the Caernarvon basin off the west coast of Wales, and a group led by Kerr McGee Oil (U.K.) plc was awarded three blocks in the Orcadian basin north of the Orkney Islands in Quadrants 6 and 7.

In the southern gas basin, companies have made a commitment to penetrate the Carboniferous.

This will yield the first indication of the rocks below this horizon and the prospects for finding gas or oil. DOE described the frontier round as a success.

In recognition of difficult operating conditions and high risks, more favorable terms were available.

In the first 3 years of the initial 9 year period, companies are required only to conduct seismic surveys, although some applicants offered drilling commitments during discussions that preceded the frontier awards. The acreage retained in later periods is to be determined by the companies' drilling activity in the first 9 years.

DOE said successful frontier round applicants focused on subtle plays, some of which lie under several thousand feet of very dense volcanic rock.

NEW PARTICIPANTS

A number of new companies received U.K. offshore acreage for the first time.

National Power, one of the two main electrical power generating companies in the U.K. building a number of gas fired plants, was awarded 25% a stake in Block 42/10b in the southern gas basin. The block, operated by Total Oil Marine plc, is just north of the 42/15-1 gas discovery.

Another new entrant, Euroil Exploration Ltd., part of the SELM group of Italy, also holds a 16% interest in the block.

The second power company to win offshore acreage was Enron Oil U.K. Ltd. Enron is the operator of Britain's biggest gas fired cogeneration station, currently under construction at Teesside in Northeast England.

Enron has a contract with a group led by Amoco (U.K.) Exploration Ltd. to supply the station from the Central North Sea through the CATS pipeline system.

Enron received a 25% interest in four blocks in the southern North Sea, all operated by Amoco. Blocks 43/06 and 43/07 are west of Forbes gas field, while Blocks 44/14 and 44/15 lie northeast of Total's Caister gas development. The single most successful company was Conoco (U.K.) Ltd. It received 13 blocks, all as operator.

Edinburgh, Scotland, analysts County Natwest Woodmac calculated that 34% of the acreage went to U.S. companies. U.K. independents took 25%, U.K. majors 10%, and others 31%.