The recent announcement of awards under the 25th Seaward Licensing Round by the Department of Energy and Climate Change (DECC) saw a significant increase in licences awarded, with figures rising from 150 last year to 171. The number of licences awarded is likely to go even higher, as 46 of the blocks applied for have yet to be awarded. Further environmental assessments were deemed necessary because the blocks are situated in the vicinity of Special Areas of Conservation or Special Protection Areas. Decisions on these blocks are expected by the end of the year.

The level of awards increased for all licence categories except 'promote' licences, which are designed to encourage new entrants. The number of new companies being offered licences also fell to less than half the level for last year. This suggests a level of uncertainty as to how well smaller players will cope in these difficult financial times. Nevertheless, a number of Scottish independent companies were among successful applicants, in particular some Aberdeen-based firms, for example Silverstone Energy and Venture Production.

It remains to be seen whether the fact that oil prices have fallen dramatically since licence applications closed in May, along with the general economic recession, may mean companies invest less freely in exploration and production. The fact that overall numbers have significantly increased is however a positive indicator, demonstrating a continued commitment by the oil and gas industry to operations in the United Kingdom Continental Shelf (UKCS). 

A full list of awards made can be seen at:
http://www.og.berr.gov.uk/upstream/licensing/
25_rnd/index.htm

05 December 2008

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