Page 9 - Euroil Week 50 2019

EurOil POLICY EurOil
UK hails “considerable” interest in licensing round
UK
More bids were received from more companies for more blocks.
UK upstream regulator the Oil and Gas Author- ity (OGA) has reported “considerable interest” from its 32nd offshore licensing round.
The contest, which closed on November 12, attracted 104 offers from 71 companies “ranging from multinationals to new country entrants,” the OGA said in a statement on December 26. The applications received cover 245 blocks and part-blocks across the North Sea and west of the Shetlands.
“The response to the round has been very positive, exceeding the interest received for the 30th offshore licensing round, which was also in the more mature areas of the UKCS,” the OGA’s head of exploration, Nick Richard- son, commented. “We look forward to see- ing how the data released in support of the round has been used to supply the applications submitted.”
The 30th round, which took place in 2017, received 96 applications from 68 companies for 239 blocks, while last year’s 31st contest attracted only 36 offers from 35 companies for 164 blocks.
The OGA also took the opportunity to defend the UK’s continued production of oil and gas, despite its pledge to bring net emissions to zero by 2050.
“The OGA understands why there could be concern about UK domestic production of oil and gas in this contest,” the agency said. “How- ever, oil and gas will remain an important part of our energy mix for the foreseeable future, including under net zero scenarios, where the UK is still expected to be a net importer.”
“As such, managing the declining production and maximising the economic recovery from the UK remains vital to meet those energy demands as long as they exit, and to reduce reliance on hydrocarbon imports,” it said.
The OGA aims to award licences based on the bids in the second quarter of 2020. It said it would discuss the timing and nature of its next licensing round with the industry, but cautioned this was unlikely to be held in 2020.
The encouraging numbers from the latest round come at a time when the UK’s offshore is contending with rising costs and a recent sharp decline in the success rate of exploratory drilling. The number of project sanctions is also antici- pated to dip this year from a record dozen in 2018 – more than the previous three years com- bined, according to the Oil and Gas UK (OGUK) lobby group. The total for 2019 is expected to be between 8 and 10. ™
Week 50 19•December•2019 w w w . N E W S B A S E . c o m P9