Government awards record number of offshore oil and gas licences

Reuters

LONDON (Reuters) - The government has awarded a record number of offshore oil and gas licences in its latest round of tenders, it said on Friday, as the country scrambles to attract new exploration before existing infrastructure is decommissioned.

The energy ministry awarded 52 exploration licences under the second and final tranche of its 27th offshore round. That brings the round's total to 219 licences, exceeding the previous record of 190 awarded in the 26th round.

Friday's tranche included 21 smaller and independent companies that are new entrants to the market, the government said without naming them.

"It is vital that we maximise the opportunities available both in the North Sea and onshore to boost growth, energy security and jobs," said Energy Minister, Michael Fallon.

Britain's fossil fuel reserves are declining quickly and the focus has been shifted to linking new oil and gas fields to existing infrastructure rather than building new facilities.

Some new prospects can only be developed economically if they can draw on pipelines and platforms that are already in place but the established operators that run these are beginning to plan to shut them down.

The government estimates that around 20 billion barrels of oil and gas can still be retrieved from the British North Sea. It plans to launch its next offshore licensing round in January.

Next year, Britain will also hold its 14th tender for onshore oil and gas permits, a round that is expected to attract high demand due to growing interest in shale gas exploration.

The round has been delayed by around four years after the licensing process was suspended following earth tremors caused by shale gas exploration, or fracking, in Lancashire, northwest England.

(Reporting by Karolin Schaps; Editing by Anthony Barker)

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