OGA offers 65 companies awards in the UK’s 32nd offshore licensing round

Source: press release, 3 September 2020

Antrim spuds Erne exploration well offshore UK (photo: OGA)
Antrim spuds Erne exploration well offshore UK (photo: OGA)

UK’s Oil and Gas Authority (OGA) has offered for award 113 licence areas over 259 blocks or part-blocks to 65 companies in the 32nd Offshore Licensing Round.

The round offered blocks in mature, producing areas close to existing infrastructure, under the flexible terms of the Innovate Licence. This enables applicants to define a licence duration and phasing that will allow them to execute the optimal work programme. The majority of the licences will enter the Initial Term (Phase A or Phase B exploration stage), and 16 of the awards are for licences that will proceed straight to Second Term, either for potential developments, or re-developments of fields where production had ceased and the acreage had been relinquished.

The OGA provided a suite of new data and analyses, prospect and discovery reports, well and seismic data to support this round. Additionally, the creation of the National Data Repository (NDR) in 2019 significantly improved data availability and access.

Following recent successful annual licensing rounds, as previously announced, the OGA is taking a temporary pause from annual licence round activity and will not run a licence round in what would have been the 2020/21 period. This will allow relinquishments to take place so more coherent areas may be reoffered in future, giving industry time to deliver on work commitments in the existing portfolio of licences. Industry is encouraged to use the pause to acquire data and carry out studies in preparation for the next round. The OGA will engage with industry on the timing and nature of the next offshore licensing round.

The UK government forecasts point to oil and gas remaining an important part of the energy mix for the foreseeable future, as the move is made towards net zero, as the UK is still expected to be a net importer. As such, managing the declining production and maximising the economic recovery from the UK remains vital to meet those energy demands as long as they exist, and to reduce reliance on hydrocarbon imports. The OGA is implementing a programme to integrate net zero considerations into its core business, including refreshing its Strategy. Licenses awarded in this 32nd Offshore Licensing Round are expected to be stewarded under this new Strategy.