Energy Voice | Experts ‘excited’ by North Sea operators’ urgency

Oil industry experts said they were “excited” by operators’ plans to get straight to work following the latest North Sea licence auction.

The Oil and Gas Authority (OGA) announced the awards yesterday, and said 14 of the licences would immediately progress to the field development planning stage.

Kevin Swann, of energy research consultancy Wood Mackenzie, said: “The UK is in desperate need of new projects to fill a development pipeline that is all but empty beyond the early 2020s, and 14 new pre-FID (final investment decision) projects could go a long way to rectifying that.”

Mr Swann also said the 30th licensing round proved big players were not ready to leave UK waters yet.

He said: “The eight firm exploration wells among the awards, with big companies like Shell, BP, Equinor and ConocoPhillips among those set to drill, is a big vote of confidence in the UK. It shows the big players are not ready to leave UK waters yet.

“Newer kids on the block, like private equity-backed Chrysaor and small exploration and production companies like IOG and i3, have committed to new exploration wells too, showing that UK exploration interest is strong across the corporate landscape.”

John Scrimgeour, director of the Energy Institute at Aberdeen University, said it was “very encouraging” that companies were confident enough to jump straight into development.

Mr Scrimgeour also said he was encouraged by the amount of activity west of Shetland.

He said: “I like to see West of Shetland as there is a lot of potential there it’s an area that for us as a university our science department has worked a lot on, it’s an unusual geological setting. It’s taken longer to understand than conventional basins. The field is huge and BP has a huge operation out there, so there must be huge potential. It’s underexplored compared to the rest of the UK, so that’s great to see.”

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