UK announces 27 new North Sea oil and gas licences

The UK Government on Monday announced 27 new licence offers for oil and gas exploration as part of the 33^rd round of hydrocarbon exploration licenses in the North Sea, marking a major boost for the country’s energy production and security.

Announcing the licence offers, the North Sea Transition Authority (NSTA) said on Monday that priority had been given to locations which have the potential to go into production more quickly than others. In addition to the 27 licences, six more blocks, which were also ready to be offered, have been merged into five existing licences, the UK regulator said.

“All of the 258 Blocks which have been applied for have been through the initial Habitat Regulation Assessment (HRA) and the blocks being awarded today have been identified as not requiring further assessment. These licences in the Central and Northern North Sea, and West of Shetland were awarded first to let operators press ahead with their plans to explore and develop oil and gas resources. In recent years, the average time from licence award to production is around five years,” the NSTA said in a statement.

The 33rd Oil and Gas Licensing Round was launched in October 2022 with 931 blocks and part-blocks made available for application. In total, the NSTA received 115 applications from 76 companies for 258 blocks/part-blocks – the highest participation since the introduction of the Innovate Licences in 29th Round in 2016/17.

According to the government, the announcement is part of the NSTA’s wider efforts to support the UK’s energy security options, which includes the licensing of offshore gas stores and engagement with industry on opportunities to reopen closed wells.

“Ensuring that the UK has broad options for energy security is at the heart of our work and these licences were awarded in the expectation that the licensees will get down to work immediately. The NSTA will work with the licensees to make sure that where production can be achieved it happens as quickly as possible,” Stuart Payne, NSTA Chief Executive, said in a statement.

According to UK Energy Security Secretary Claire Coutinho, the UK will continue to need oil and gas over the coming decades even as it begins delivering on its net zero goals.

“It’s common sense to reduce our reliance on foreign imports and use our own supply – it’s better for our economy, the environment and our energy security. These new licences are a welcome boost for the UK industry, which already supports around 200,000 jobs and contributes £16 billion to the economy each year – while advancing our transition to low-carbon technologies, on which our future prosperity depends,” Coutinho said.

There are currently 284 offshore fields in production in the UK North Sea and an estimated 5.25bn boe in total projected production to 2050. Oil and gas currently contribute around three quarters of the UK’s domestic energy needs. A recommendation for the remaining 203 blocks will be made once the Habitat Regulation Assessment Further Appropriate Assessment process has been completed, the NSTA said.