In vote of confidence, oil firms mop up new North Sea blocks
By Ron Bousso
LONDON, May 23 (Reuters) - The UK Oil and Gas Authority
(OGA) on Wednesday awarded 123 licences to 61 companies to
explore for and develop new fields in the North Sea, in the
latest sign of confidence in the ageing basin that has enjoyed a
revival in recent years.
Companies ranging from Royal Dutch Shell, BP
and Norway's Equinor, to smaller independents
including Siccar Point, Chrysaor and Premier Oil were
awarded 229 blocks covering a total area of 26,659 square km,
the OGA said in a statement.
"The OGA expects this round to lead very quickly to
activity, providing a welcome boost to exploration," it said.
Fourteen of those licences are expected to progress straight
to field development planning, it said.
The round could unlock about a dozen undeveloped discoveries
containing an estimated 320 million barrels of oil equivalent
(boe), it added.
The North Sea was one of the world’s first offshore basins,
and has produced oil for more than four decades.
Although output in the basin has sharply declined since
peaking in the late 1990s, it has seen a revival in recent years
after large projects such as the BP-operated,
130,000-barrels-per-day Quad 204 in the western Shetlands came
The OGA estimates the North Sea holds reserves of 1.5
"The OGA's first mature licencing round, following the
Norwegian model, appears to have been a great success," Wood
Mackenzie analyst Kevin Swann said in a note.
"The UK is in desperate need of new projects to fill a
development pipeline that is all but empty beyond the early
2020s," Swann said.
"The eight firm exploration wells among the awards, with big
companies like Shell, BP, Equinor and ConocoPhillips among those
set to drill, is a big vote of confidence in the UK. It shows
the big players are not ready to leave UK waters yet."
(Reporting by Ron Bousso; Editing by Dale Hudson and Amanda
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