North Sea oil and gas licensing round 'successful'

The government said it received a record number of applications under the 27th licensing round

The UK government has claimed the North Sea remains a "fertile landscape for investors" after awarding 167 licences for oil and gas projects on the UK Continental Shelf.

The new licenses offered by the Department of Energy and Climate Change (DECC) cover 330 North Sea blocks.

Another 61 blocks face environmental assessment in the 27th licensing round.

A total of 224 applications covering 418 blocks were lodged - the most ever received in one round.

The winners included Aberdeen-based Faroe Petroleum. Its seven provisional awards were concentrated west of Shetlands, along with blocks in both the northern and central North Sea.

Parkmead Group was awarded six new licences comprising interests in a total of 25 offshore blocks or partial blocks across the UKCS.

Investment banking firm Jefferies said the "very strong interest" shown in the North Sea - and the wide range of companies which had successfully gained new acreage - supported its view that "substantial value" remained in the North Sea for well-funded explorers and producers.

Energy Minister John Hayes said the oil and gas sector supported 440,000 jobs and benefited the UK's trade balance to the tune of £40bn.

"This successful licensing round shows we are taking the right action to offer certainty and confidence to investors," he commented.

"Our fiscal regime is now encouraging small fields into production and our licensing regime supports new faces as well the big players to invest.

"Importantly, we are guaranteeing every last economic drop of oil and gas is produced for the benefit of the UK."

He added: "It is our work with industry that is cultivating this precious resource, making our seas a fertile landscape for investors for many years to come."

Industry body Oil and Gas UK welcomed the latest awards.

'Vast opportunity'

Economics and commercial director Mike Tholen said: "It reflects the vast opportunity that remains for business and provides reassurance of the government's support for the long-term health of our industry.

"The record number of applications for licences in this 27th round shows that investor confidence is returning following 18 months of constructive engagement with the Treasury and the announcement of several measures aimed at boosting activity.

"However, last year saw the lowest exploration for many decades so we must do everything we can to ensure that the award of licences translates into actual exploration for the billions of barrels of so far undiscovered oil and gas."

Energy Minister Fergus Ewing said the latest round of awards showed once again that Scotland had "astounding" energy resources.

"There are up to 24 billion recoverable barrels of oil equivalent remaining in the North Sea, with a wholesale value of £1.5 trillion, and this successful licensing round proves that the North Sea continues to attract investors" he said.

"Continuing and sustained investment is vital to the long-term success of the sector and our Oil and Gas Strategy, launched by the first minister earlier this year, sets out for the first time a clear plan of support and programme of actions designed to ensure that our vision of a long-term prosperous sector can be realised."