Is North Sea running out of oil and gas? Quite the opposite
After a few bad years, the seemingly sunken North Sea oil and gas fields are back with a bang
The North Sea is back. A successful licensing round cemented North Sea Oil as one of the world’s most mature oil and gas basins.
On Wednesday, the UK Oil and Gas Authority (OGA) awarded 123 licenses—over 299 blocks—to 61 companies in the 30th Offshore Licensing Round in the UK North Sea.
The success of this round, involving companies such as BP and Dutch Shell, will quickly lead to high activity and a boost in exploration.
One of the blocks contains the Palaeocene Crown discovery, which estimates suggest a range of recoverable 4-16m barrels of oil.
Brian Larkin, CEO of United Oil & Gas, said. "Crown is the latest addition to our growing portfolio of high grade targets in the UK, Italy, and offshore Jamaica that are at various stages of development and monetisation."
The news was well received in the stock market, as London-listed United Oil & Gas were up 3pc in afternoon trading on Thursday.
The new programme involves 8 firm exploration wells, 14 licenses, progressing the field development planning, and 9 firm new-shoot 3D seismic surveys.
Is the UK Continental Shelf back?
For an oil and gas basin that suffers frequent acquisitions of being dry, North Sea is seemingly teaming with the stuff.
The OGA Chief Executive, Dr. Andy Samuel agrees, “The UKCS is back. Big questions facing the basin have been answered in this round. Exploration is very much alive with lots of prospects generated and new wells to be drilled.”
He also said the OGA and the UK government have worked hard over the last three years to bring the project together, culminating in a healthy pipeline that comprises of 50 different projects.
Big questions over the future of North Sea have been answered in this round.
This is a remarkable development, considering the price crash of 2014 that had seemingly brought the North Sea to a standstill. After three years, it appears that it has come back from the brink.
The success of this round may unlock dozens of undeveloped discoveries with new wells to be drilled. Estimates from the OGA suggest that 320 million barrels of oil equivalent (boe) can now progress further to field development.
A huge thumbs up for confidence in the British oil and gas industry and good news for the future of the UK gas and oil pipeline that was worryingly barren beyond 2020.