LONDON – Britain’s Department of Energy and Climate Change (DECC) has awarded 144 licenses under the UK’s 26th licensing round, 48 fewer than under the 25th round.
However, a further prospective 45 licenses are pending the results of more detailed environmental impact assessments.
The number of blocks associated with the new awards is 268, compared with 303 for the 25th round, with a further 99 blocks contingent on the license reviews.
Energy Minister Charles Hendry said: “Whilst in the long-term, we want to decarbonize our energy system, we have moved swiftly to offer these licenses as we must realise the optimum value from the UK’s energy resources and ensure secure energy supplies.”
“We remain absolutely vigilant and determined to ensure that exploration in our waters is done safely and with minimal impact to the environment.”
“Government will continue to work with industry through the PILOT forum to maintain investment in the North Sea. Earlier initiatives including innovation in the licensing system, a focus on ‘brown fields’ stewardship and on fallow assets have helped maintain high levels of interest in recent years. We will work closely with industry to ensure that this is carried through so that activity and investment should be as high as possible.”
Malcolm Webb, CEO of industry association Oil & Gas UK, said: “The scale of interest demonstrated in this recent licensing round confirms that there continues to be considerable appetite for developing the UK’s still substantial oil and gas resource, estimated to be up to 24 Bbbl.”
“The announcement provides reassurance of the government’s support for the long-term health of our industry. This support is vital if the UK offshore oil and gas industry is to continue successfully to attract investment to the UK.”
“However, we note with concern that a further 99 blocks have been held back…We would urge the government to conclude this process as quickly as possible to allow prospective licensees to move ahead swiftly with investment in new exploration activity.”
Among the companies to announce details of their awards, Hurricane Exploration, currently exploring basement prospects west of Shetland, received a segment of block 204/23b. This will give the company a 100% interest in its Typhoon oil-bearing basement prospect and the overlying Tempest heavy-oil discovery.
In the same region, the OMV, Dana and Rocksource partnership secured an exploration license, comprising Blocks 214/5c, 214/9d and 214/10b. All are adjacent to the Tobermory and Bunnehaven discoveries and to existing Rocksource acreage (P1484). The work program will include obtaining and re-processing 3D seismic.
Faroe Petroleum, which is a partner in various potentially high-impact drilling programs along the deepwater Atlantic Margin, has provisionally been awarded four new exploration licenses west of Shetland. These comprise:
Grouse (Block 217/11 (part), 12, 13(part), 16(part), 17(part), 18(part), 19(part), 20, 218/11(part), 12(part), 16, 17 and 22 (part) – Faroe 37.5% and operator. This license is on the Corona Ridge play, south of the Lagavulin prospect which Chevron is currently drilling. Faroe describes Grouse as a large structural prospect post-basalt in a new play in the west of Shetland area. The work program involves acquisition, purchase and reprocessing of 2D seismic data and further geotechnical studies, prior to a drill or drop decision.
Balblair (Block 223/26, 27, 219/2 and 3) – Faroe Petroleum 50% and operator.
Ardberg (Blocks 222/28, 29) – Faroe Petroleum 50% and operator.
Both licenses are situated between the Company’s Talisker permit and the UK/Norway offshore median line. Balblair and Ardberg are large, structurally controlled prospects on the north Corona Ridge. The work program is the same as for Grouse.
Aileen (Blocks 205/13b, 14, 18 & 19) – Faroe Petroleum 50% and operator.
This license is to the east of the Tornado discovery. Faroe describes Aileen as a significant prospect in a relatively unexplored play on the west side of the giant, BP-operated Clair field. The partners will purchase 2D data, reprocess 3D seismic data and perform geotechnical studies, prior to a drill or drop decision.
In the central UK North Sea, Premier Oil was provisionally awarded interests in five new licenses, two as operator. The acreage also includes blocks close to the company’s existing interests, including:
14/30b (Nexen (op) 50%, Premier 50%)
This block is adjacent to the Upper Jurassic Kildare oil discovery in 15/26b. The West Rochelle discovery well is currently in progress on the border of 15/26b and an adjoining block. The work program for 14/30b includes 3D seismic reprocessing to assess the potential of a western extension of Kildare.
15/9, 15/10, 15/14 and 15/15 (Nexen (op) 50%, Premier 50%)
This is a relatively unexplored area with potential prospectivity at Eocene, Paleocene, Jurassic and Zechstein levels. The work program comprises working up new proprietary 3D acquired this year that covers the 15/13b license, and which extends over the prospectivity identified in the 15/9, 15/10, 15/14 and 15/15 blocks.
Premier has also signed an agreement with Nexen to farm in to adjacent Block 15/13b, containing the Eagle and Talon prospects which extend into the adjacent 26th Round acreage.
15/23g (Premier (op) 50%, Nexen 50%)
This block is north-east of Premier’s Blackhorse discovery. The company already has equity in adjacent blocks to the south (15/23b 50%, 15/23e 100%) and west (15/22 40%) and close to Block 15/23d, containing the Bugle discovery. The main prospect in 15/23g is a potential eastern extension of Blackhorse, which Premier describes as two-way dip-closed with two-way fault closure. The work program here is seismic inversion of a 50-sq km (19.3-sq mi) area, with a view to evaluating the prospect as part of a tie-back in the Greater Scott area.
21/7b (Premier (op) 70%, Antrim 30%)
This block, in the western part of the central North Sea basin, includes the Typhoon prospect, a stratigraphic trap with similar attributes to the nearby Scolty and Torphins discoveries. Here the commitments include one firm well.
22/26c and 22/21c
This is former 1st round acreage containing the Cringlette and Ronan prospects. The work program includes acquisition of new 3D seismic to assess a large Upper Jurassic trap and associated prospects.
In the northern North Sea, Serica Energy gained a 100% interest in production License over Blocks 210/19a and 210/. These are part blocks immediately adjacent to the TAQA-operated Otter oil field.
Serica says various oil prospects have been identified on the blocks at Jurassic Brent Group and Home Sand levels. Two of the Brent Group prospects are down-faulted traps, an emerging play in the northern North Sea, the other being a conventional Brent fault block. The fourth prospect is in a shallower Jurassic reservoir (“Home Sand”). All four prospects have prospective resources ranging from 17 to 51 MMbbl.
The work program includes licensing and interpretation of 3D seismic data, leading to a drill or drop decision within two years.
EnCore Oil won two licenses covering six blocks and part blocks.
Blocks 14/29e, 20/4c (part) and 20/5f (part) are south west of the Tudor Rose heavy oil discovery and the Buffalo prospect in EnCore’s existing blocks 14/29c (split), 14/30b (split) and 14/30a. EnCore will operator with a 50% interest, and will reprocess existing 3D seismic data.
Blocks 28/5, 28/10a and 29/1d (split) are east and north east of the Catcher oil discovery in blocks 28/9 and 28/10b/ EnCore will operator with 100% equity.
Noreco picked up two licenses, one as operator in Quadrant 14 in the Outer Moray Firth and one as partner in block 16/23, close to the UK/Norway median line.
The Q 14 area includes prospects and discoveries in Jurassic and Lower Cretaceous reservoirs, close to the Talisman-operated Claymore field, while Block 16/23 is a Jurassic play. The work program involves either acquisition or reprocessing of seismic data in the first phase, prior to a drill or drop decision.
Canadian company Nexen applied successfully for 10 licenses covering 18 blocks, most of them close to its existing acreage and production infrastructure.
PA Resources UK has one license pending for Block 22/18b in the central North Sea, which it will operate in partnership with Valiant Exploration and First Oil Expro. The work program involves reprocessing existing 3D seismic data to assess an identified prospect, with an option to drill an exploration well.
Heavy oil specialist Xcite Energy Resources won Blocks 9/3c and 9/3d, which the company says will enhance the development potential of the Block 9/3 area containing the Bentley field.
Finally, Maersk Oil North Sea UK gained interests in 10 blocks:
Block 22/4c with partner Venture
Blocks 22/21c, 22/26c with Premier and Venture
Block 22/30e with Britoil, ENI, Nippon
Block 23/26e with Britoil, ENI, Nippon.
Blocks 3/25b, 3/30b, 4/21, 4/26b (Total as operator)
Block 30/1a (GDF Suez as operator, other partners being RWE and Nippon).