The UK has received 115 bids for its latest oil and gas licensing round and priority blocks — those that offer fast-track development potential — could be awarded as early as April.
The 33rd Round, which closed last week, offered 931 North Sea tracts across 258 blocks and part-blocks and went to 76 companies.
The acreage on offer included four priority areas, which have known hydrocarbons, in which there was very keen interest and could see production begin in 18 months, the regulator North Sea Transition Authority (NSTA) noted.
“The bids will now be carefully studied, with a view to awarding licences quickly and supporting licensees to go into production as soon as appropriate. There are several necessary consents after licensing and before production to ensure these developments are also in line with net zero,” the NSTA said.
Internal analysis by the authority shows the average time between recent discoveries and first production has been almost five years, and it hopes that, since the priority areas host existing discoveries, these cluster areas can be brought on stream much sooner.
NSTA head of exploration and new ventures Nick Richardson added: “We have seen a strong response from industry to the round, which has exceeded application levels compared to previous rounds.
“We will now be working hard to analyse the applications with a view to awarding the first licences from the second quarter of 2023.”
Supporting energy security
The 33rd Round is a key part of the NSTA’s drive to support UK energy security, which also includes licensing the Rough gas storage facility, and encouraging operators to look at reopening closed wells.
UK Energy & Climate Minister Graham Stuart said: “Putin’s illegal invasion of Ukraine has led to volatile global energy markets.
“It’s fantastic to see such interest from industry in this round, with the awarded licences set to play an important role in boosting domestic energy production and securing the UK’s long-term energy security of supply.”
The authority commented that the drive to reach net-zero greenhouse gas emissions by 2050 continues alongside the drive for energy security and they support each other.
“New developments tend to have lower emissions than older fields so can contribute to reducing average production emissions. Consuming gas from the North Sea also reduces the need to consume liquefied natural gas from elsewhere, which has around double the carbon footprint,” it said.
Mark Wilson, director of HSE and operations at Offshore Energies UK said: “All new developments will have lower emissions than older fields, helping the industry meet its target of halving emissions by 2030 and net-zero emissions by 2050.
“Our industry has already reduced the emissions from UK oil and gas production by 20% since 2018. New developments will be subject to checks by the industry regulators to ensure that the production is consistent with our binding commitments on climate change.”
Production emissions in the UK have been cut by more than a fifth between 2018 and 2021. Projections indicate the sector is on track to meet reduction targets of 10% by 2025 and 25% by 2027 — agreed in the North Sea Transition Deal in 2021, the NSTA confirmed.
Since February last year, interventions have prevented the lifetime emission of 1.4 million tonnes of carbon dioxide equivalent, similar to taking more than 500,000 cars off the road for a year, the agency claimed.
