Page 6 - EurOil Week 36

EurOil COMMENTARY EurOil

UK dishes out 113 licences

in latest offshore draw

The UK is holding off on further rounds, however, while its government reviews
its oil and gas licensing policy to ensure it is in line with climate goals

UK THE UK has offered for award some 113 licences Independent Oil & Gas (IOG) bagged two
to 65 companies in its 32nd offshore licens- licences covering four blocks near its Core
ing round, which kicked off in July 2019. But Project in the SNS. It will manage one through
WHAT: upstream regulator OGA says it is taking a pause a joint venture with its Core Project partner
The UK has offered for from further contests, while the government is CalEnergy Resources (CER). That licence holds
award some 113 licences reviewing its licensing policy to ensure it aligns the Viper and Sinope South discoveries with
to 65 companies in its with climate goals. 1.3 bcm and 1.0 bcm in mid-case recoverable
32nd offshore round, The licences cover 259 blocks or partial resources respectively.
covering mature areas blocks across the North Sea and West of Shet- The other licence lies between IOG’s Blythe
across the North Sea and lands, in areas near existing infrastructure. The and Harvey sites and comprises the Allerdale,
West of Shetlands. winners were a broad range of companies, rang- Driftwood and Bradfield prospects and possibly
ing from majors such as BP, Royal Dutch Shell an extension of the Redwell field.
WHY: and France’s Total to mid-sized players Neptune IOG is required to conduct various seismic
OGUK says the result Energy, Chrysaor and Premier Oil to smaller work under the licence terms but there are no
shows the sector’s independents typified by Deltic Energy, Inde- well commitments.
attractiveness despite pendent Oil & Gas (IOG) and Corallian Energy. “With several existing gas discoveries, these
difficult conditions. The number of awards far exceeded the 37 new licences fit straight into our focused strat-
offered up to 30 companies in the UK’s 31st egy of cost-efficient production hubs delivered
WHAT NEXT: round, but fell short of the 123 licences awarded through co-owned infrastructure, providing
The government is to 61 companies in the 30th contest. opportunities to drive up shareholder returns,”
assessing whether its “At a time when companies face huge pres- IOG CEO Andrew Hockey said.
licensing policy aligns sures it is encouraging that our basin continues The Core Project comprises the Southwark,
with its net-zero target to demonstrate its attractiveness to a wide range Blythe, Elgood, Goddard, Nailsworth and Elland
for 2050. An independent of companies,” said the OGUK industry associa- fields and is aimed at delivering 11.6 bcm of gas.
report last year showed tion’s supply chain and operations director, Katy Production from the first phase, covering South-
the UK was falling behind Heidenreich, commenting on the result. “This is wark, Blythe and Elgood, is due to start in July
its promises. a crucial element in unlocking the new invest- next year.
ment that will help continue to meet UK energy Fellow junior Deltic Energy will also pick up
needs and sustain jobs across our sector.” six licences, including four solely operated and
two on a 30:70 basis with Royal Dutch Shell. Five
Selected highlights are in the SNS and one in the CNS.
Premier snapped up three licences in the round – Deltic, formerly known as Cluff Natural
two directly adjacent to its Tolmount gas project Resources, has teamed up with Shell to sink two
in the southern North Sea (SNS) and a third next wells at the Pensacola and Selene prospects in the
to its Catcher Area fields in the central North Sea SNS. Drilling at Pensacola will take place in the
(CNS). latter half of next year, while the Selene well will
Premier shot a 3D seismic campaign across be spudded in 2022.
the Greater Tolmount Area last year that covered Corallian Energy took three blocks, one of
significant parts of the SNS licences it has been which holds the West of Shetland (WoS) Victory
offered. Any discoveries could be tied back to gas find with 4.4 bcm in 2C contingent resources.
Tolmount, which is due to start production in It intends to take Victory straight to the develop-
the second quarter of 2021 and recover 500bn ment phase, relying on a tieback to the Total-op-
cubic feet (14.2bn cubic metres) of gas. erated Greater Laggan Area (GLA) pipeline,
The CNS licence it is set to obtain comprises though this will require negotiations.
the Cougar and Rapide prospects, viewed as Corallian aims to file a development plan for
potential tie-backs to the Catcher Area facilities. the field within 18 months of the licence award
Private equity-backed Chrysaor, one of the being finalised.
North Sea’s leading producers, scored nine The company picked up a second WoS
operated and five non-operated licences, mostly licence holding the Laxford gas field some 24
in areas near its existing assets. km north-west of Victory, along with the Scourie

P6 www. NEWSBASE .com Week 36 10•September•2020