Oil and Gas Sector Celebrates New Exploration Licenses in North Sea

by Victor Adetimilehin

The oil and gas sector is welcoming a significant development in the North Sea, as the North Sea Transition Authority (NSTA) confirms the offer of 27 new exploration licenses as part of the 33rd Licensing Round. These licenses are strategically prioritized for areas where production can be initiated more rapidly, emphasizing the importance of energy security and domestic production.

The NSTA made over 900 blocks and part-blocks available for application, resulting in 115 applications submitted by 76 companies for 258 of the offered blocks, marking the highest number of applications since the 29th round in 2016-17. Out of these, 55 blocks could potentially be awarded to 14 companies.

David Whitehouse, CEO of Offshore Energies UK (OEUK), hailed this announcement as a significant boost to the UK’s energy security and the livelihoods of approximately 200,000 people employed in the offshore energy sector. He emphasized the crucial role played by these individuals in ensuring a consistent supply of domestically produced energy for the UK.

OEUK contends that continuous exploration is essential to counter the ongoing decline in domestic production, with new licenses needed to maintain the current rate of decline in the basin. According to NSTA data cited by OEUK, only 3% of production was replaced by new discoveries in 2022, which equates to investing in one new barrel for every 33 barrels produced.

Currently, there are 284 offshore fields in production in the UK North Sea, with an estimated total projected production of 5.25 billion barrels of oil equivalent (boe) until 2050. However, the UK is set to close 20 fields this year, while only two new sites are expected to commence operations.

Whitehouse highlighted the need for an integrated energy system that includes both oil and gas and renewables to meet the UK’s energy requirements in the years ahead. He stressed that energy security is a matter of national security and called for pragmatic policies and political consensus to attract significant investments in wind, hydrogen, carbon capture, and oil and gas production.

Furthermore, this investment could not only drive economic growth but also help the UK reach its climate goals and reduce the reliance on importing energy from other countries, which cost the UK £117 billion last year.

The news was also welcomed for its potential to boost the North East economy, with significant job support in Scotland and the Aberdeen region. Ryan Crighton, Policy Director at Aberdeen & Grampian Chamber of Commerce, emphasized that domestic production is crucial for jobs, the economy, and emissions reduction.

The NSTA expects to offer more blocks “subject to additional environmental checks,” further highlighting the commitment to responsible exploration and production.

In summary, the allocation of new exploration licenses in the North Sea is seen as a positive step toward enhancing energy security, supporting job growth, and reducing the carbon footprint by prioritizing domestic production.

Source: [Energy Voice]

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