Thursday 24 May 2018

The Oil and Gas Authority (OGA) has offered for award 123 licences over 229 blocks or part-blocks to 61 companies in the 30th Offshore Licensing Round. These successful awards act as a strong platform for future exploration and production across the UK Continental Shelf (UKCS) and can help transform exploration activity levels.

In response to strong interest, the OGA has made available huge areas of acreage; a total of 26,659 km2 has been offered for award and if the offers are taken up, the additional area under licence will be an increase of 50% on existing acreage held.

The OGA expects this round to lead very quickly to activity, providing a welcome boost to exploration. The new work programme commitments include eight firm exploration/appraisal wells, nine firm new-shoot 3D seismic surveys and 14 licences progressing straight to field development planning (second term licences).

The round may help to unlock around a dozen undeveloped discoveries containing a central estimate of 320 million barrels of oil equivalent (boe) of resource in undeveloped oil and gas discoveries which were previously stranded but can now be progressed through further appraisal to field development.

It is estimated the UKCS currently has around 1.5 billion boe (source: Woodmac) of resource in potentially commercial undeveloped discoveries, many of which were previously considered to be too small or technically challenging. The 30th round alone effectively provides line of sight to the progression of 20% of these untapped reserves.

In addition, using industry’s resource estimates, around 3.6 billion boe (mean-risked volume potential) of exploration prospectivity will be progressed by the new licensees.

Awards have been offered to a broad spectrum of companies; some super-majors are expanding their footprint and new entrant companies have been attracted to invest in the UKCS for the first time, with capital investment coming from an equally diverse array of sources.

The OGA provided a number of incentives to support the round and stimulate interest, including: the new, flexible Innovate Licence; an extended 120-day application period; technology forum held in conjunction the Oil and Gas Technology Centre; and a suite of new data and analyses, including digital maps, prospect and discovery reports, plus well and seismic data.

Attention will now turn to the 31st Round, scheduled to be launched in summer 2018, which will provide high-impact exploration opportunities in under-explored and frontier areas of the UKCS. To support the next licensing round, the OGA has already released the results of the 2016 Government-Funded Seismic Programme. Almost 19,000 km of newly-acquired broadband seismic data are now freely available to download, together with approximately 23,000 km of reprocessed legacy seismic data and well data packages.

The round will cover large areas including the East Shetland Platform, North West Scotland, South West Britain and the Mid North Sea High. The seismic data are accompanied by new geotechnical studies commissioned by the OGA to investigate the key subsurface uncertainties in these areas.