Demand for new DECC North Sea exploration licences dives by 24% in two years.

North Sea oil rig

More than 170 applications – covering some 370 North Sea oil and gas blocks – were made to the latest DECC offshore licensing round – the 28th such round – which closed last month.

This follows on from recent record years such as 2012 when DECC received applications for 418 blocks, and 2010 when 378 blocks were awarded – the highest numbers since licensing began in 1964.

However, there were 224 applications made in 2012 – meaning demand for new licences has slumped by 24% in two years.

The UK Dept. of Energy will now scrutinise applications over the coming months and aims to start awarding licences in 4Q2014.

Meanwhile, in its latest official figures published yesterday, the UK Department of Energy confirms that while some 42 billion barrels of oil equivalent have been produced so far from the North Sea – there is still potentially another 20 billion barrels or so remaining.

As reported in yesterday’s Scottish Energy News, the value of Scotland’s offshore oil and gas services topped £10 billion in 2013 – and is forecast to growth by more than 30% over the next five years.

The UK’s oil and gas sector provides almost half of Britain’s energy and is by far the largest single industrial UK investor. Directly and indirectly, it supports around 450,000 jobs in the UK.

 However, UK Energy Minister Michael Fallon said: “It’s 50 years since North Sea licensing began and there remains an extraordinary level of interest which is excellent news for industry and for the UK economy.

 “We have committed to implementing all of Sir Ian Wood’s recommendations to help maximise recovery of North Sea oil and gas, and the Chancellor is reviewing the tax regime.

 “Making the most of Britain’s home grown energy is crucial to keep job and business opportunities, get the best deal for customers and reduce our reliance on foreign imports.”

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