Operators set to take on frontier in licensing round

Exploration: ‘Firm’ commitments made for three new wells

A trickle of oil and gas operators have opted to take a gamble on under-explored North Sea frontier plays.

But the rest of the industry is waiting in the wings for what is being pitched as the “most significant" offshore licensing round in decades.

This year’s round – the 29th since 1964 – saw only 17 operators take up 25 licences. The 111 North Sea blocks up for grabs covered the relatively unknown areas of the Rockall Basin, Mid-North Sea High and part of the East Shetland platform.

This was the first licensing round in two decades to focus solely on the frontier areas and yielded several promising results, according to regulator the Oil and Gas Authority (OGA).

The regulator said “firm” commitments have been made for three new wells in the medium to near term and three new operators will enter the mature basin for the first time in this virgin territory.

Both the Rockall and the Mid-North Sea High was subject to a UK Government funded £20million seismic survey, with the subsurface data given to any interested parties.

The OGA said this was “critical" to stimulating applications.

OGA chief executive Andy Samuel said: “The £20million investment in new seismic for the Rockall and Mid-North Sea High areas, subsequent release of 40,000 kilometres of new and reprocessed data, combined with the work of the MER UK Exploration Task Force in developing the innovate licence, and a stable and competitive fiscal regime has resulted in a number of quality applications in this frontier licensing round.

“We are particularly pleased to see firm well commitments, the targeting of new and under-explored plays, and first-time entrants to the basin, alongside a number of established companies, which will help stimulate further activity."

A total of 24 companies applied for the 113 blocks that were up for grabs this round.

In comparison, the 28th round saw more than 175 licenses awarded.

The 30th licensing round, due to be announced in the second quarter of 2017, could be the “most significant" in decades, OGA claimed.

The round will focus on already tapped areas of the North Sea basin.