UK licensing round study reveals near 36 BBoe potential

Offshore staff

ABERDEEN,UK – Hannon Westwood has issued an updated study on the potential resource opportunity offered under the UK’s newly-launched 26th licensing round. The number of blocks on offer is the largest of any UKCS licensing round to date, the analysts claim.

The study’s analysis reveals that there are 80-plus discoveries in the unlicensed acreage, with estimated gross unrisked potential reserves of 800 MMboe; and 750-plus prospects with estimated unrisked potential reserves of 35 Bboe.

Hannon Westwood’s review includes data on all unlicensed blocks and part-blocks available for licensing, where potential has been previously mapped. Various recent relinquishments, the analysts add, are located in proven play fairways, increasing the prospects for relatively low risk opportunities.

According to Executive Director Chris Bulley, “the whole UKCS, apart from West of Rockall, is now available for licensing. While the Round includes a number of areas that have historically been perceived as non-prospective, the wide extent now offered allows free rein to explorers with new ideas. For example, can the potential of the SW Approaches now be realized?"

“The new Field Allowance regime should also provide some boost to the smaller or more difficult developments. However the gas potential in both the Southern North Sea and West of Shetlands could benefit from a strengthening of the gas price. Improvements in the fiscal regime to improve the economics of gas projects are particularly important to allow the development of marginal gas discoveries before the ageing Southern North Sea infrastructure is decommissioned," Bulley says. 

"We speculate that the existing majors and super-majors will make only very selective applications in existing core areas and possibly in the West of Shetlands and Central North Sea HP/HT basins. However there is likely to be a good response to the round from the independents and utilities as they seek to expand their core areas and also develop new hubs," says Charles Westwood, founding partner of Hannon Westwood. "It might be a tougher round for the smaller independents and promote companies. The availability of finance is likely to remain an issue and the Government is looking more closely at the financial capability of some of the smaller companies.”


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