Scots oil minnows Cairn Energy and Faroe Petroleum land new Norwegian N. Sea exploration licences

Norway has awarded 56 new North Sea oil and gas production licences with Scottish minnow Cairn Energy – operating as Capricorn –  getting a big bite into the sector with seven licences.

Edinburgh-based Cairn only qualified recently as an operator in late 2015 and was awarded its first operated block, located in the Norwegian Sea last year. It then picked up three further licences, one as operator, in the Barents Sea in the 23rd Round.

It has now significantly increased its presence with these new awards, all located at the northern end of the North Sea, and has added two further operatorships to its Norwegian portfolio.

Another Scots minnow – Faroe Petroleum – landed four licences, including two as operator.

The company has consolidated its position around its 2016 Brasse discovery, which it is planning to appraise in 2017 and added three new exploration licences, one in the Norwegian Sea and two in the North Sea

Overall, interest was strongest in the North Sea area with 36 awards, while 17 were awarded in the Norwegian Sea. Only three awards went in the Barents Sea, reflecting the frontier nature of the basin.

The awards were dominated by state controlled Statoil and recently merged Aker-BP, but a range of smaller independents also consolidated their positions in the region. Statoil picked up 29 awards with 16 as operator, while AkerBP was awarded 21 licences with 13 as operator. 

The next largest award however went to privately funded Wellesley Petroleum with eight licences.

Wellesley, backed by Bluewater Energy, is focused on exploration in Norway and, prior to this round, held six licences in the region as a partner. Having qualified as an operator at the end of 2016, it has now been awarded eight new licences, with three as operator.

This puts it alongside Conoco Phillips and only behind Statoil, AkerBP and Shell in the number of operatorships picked up as part of this round.

According to the Edison Investment Research Oil & Gas teamit is too early to discern any underlying trends in the distribution of these licences, so further analysis will come as companies start to provide details of their strategies. All the licences require initial work programmes of G & G studies or 3D seismic acquisition or reprocessing with exploration drilling not required for between three and four years.

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