UK releases 41 new licences

LONDON, July 27, 2015 – The UK has awarded 41 licences to drill for hydrocarbons in the North Sea, the government announced on Monday. It will be the final group of licences awarded under the Oil and Gas Authority’s 28th licensing round, bringing the total number issued up to 175 across 353 blocks.

Familiar players such as BP, Shell and Austria’s OMV were among the winners of new licences. Shell was awarded one licence to explore 10 blocks, while Italy’s Eni was granted three licences covering 23 blocks, including an area in between Wales and Ireland. Other recipients included China’s Nexen and UK independents Hurricane Energy and Parkmead Group.

The current round is one of the largest in the UK’s history. The high number of licences marks intensified government efforts to spur exploration activity in the North Sea to combat declining reserves and production figures. As an offshore and mature market, the North Sea has among the highest upstream costs in the global oil and gas industry.

In March 2015, the UK government passed a series of tax cuts for North Sea operators. The measures are designed to provoke $6.2 billion of new investment and raise production by at least 120 million barrels of oil equivalent by 2020, according to the UK’s energy minister Andrea Leadsom.

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