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Low response to 31st OGA licensing round

General - Offshore oil and gas rig credit JW McLean

The Oil and Gas Authority (OGA) has claimed it received "positive interest" in its 31st licensing round covering some of the most "extensive frontier areas" of the UK continental shelf. Yet despite putting up 1,766 blocks of frontier shelf up for license, only 164 blocks received applications.

Nevertheless the interest was at least 50% higher than the last frontier licensing round it held in 2016. In order to sweeten the offering, the OGA offered strategic environmental assessment reports undertaken by the Department for Business, Energy and Industrial Strategy (BEIS), alongside habitat assessments facilitated by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) to ensure potential developers could establish the environmental constraints of bidding (EIA+P 12-Jul-18).

Head of exploration and new ventures at the OGA Nick Richardson said: "This is an encouraging set of applications, demonstrating that interest in UK offshore licensing opportunities has increased since the 29th frontier round held in 2016, with an almost 50% increase in the number of blocks applied for. The OGA has received applications on some blocks on the East Shetland Platform which have never been previously licenced, underlining the positive impact of ongoing Government-Funded data initiatives.

"The recent publication by the OGA of a comprehensive re-evaluation of the UKCS’s Yet-to-Find potential points towards an additional exploration resource base of 4.1bn barrels of oil equivalent (Bboe) in prospects and leads and 11.2Bboe in plays, largely in frontier areas, with a bias towards gas-rich opportunities. Whilst the UKCS offers a rich and attractive set of exploration and field development opportunities, the OGA continues to be concerned by low levels of drilling activity. We are encouraging industry to step up its efforts to explore for new resources, providing enhanced security of domestic supply in the future."

A supplementary round will now be held in the Greater Buchan Area in Q1 2019 which will provide a cluster of opportunities in the Outer Moray Firth. The OGA believes there could be an estimated 150-300m barrels of oil equivalent in the area.

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