Two weeks ago I wrote about the UK North Sea being a sleeper play for the global oil and gas industry.
And the last several days a number of data points emerged confirming the potential in this left-behind region.
The first indictor was a surge of new interest in the North Sea as part of the UK’s 28th Offshore Licensing Round. Which saw a near-record number of new blocks handed out to some of the world’s largest petroleum players.
The UK’s Oil and Gas Authority announced last week that it granted 175 new licenses for offshore oil and gas exploration — covering 353 blocks. Officials called it “one of the largest rounds in the five decades since the first licensing round took place in 1964”.
And it wasn’t just junior or even mid-tier firms that were rushing for North Sea waters. The round saw blocks awarded to heavyweight E&Ps such as BP, Shell, Total and ENI.
Then, just days later, further news on the North Sea confirmed why there’s so much interest.
That was new statistics from the UK’s Department for Energy. Showing that oil and gas production in the North Sea has done something no one was expecting — risen.
The numbers suggest that production during the first six months of 2015 rose by 2.5% as compared to H1 2014.
While that might not sound like a spectacular rise, it’s a big development for the North Sea. Because it would represent the first time production has increased here in 15 years.
Authorities cautioned that the data is provisional. But if the trend is confirmed, it could signal a turn-around for this “mature” region — of the kind that took place in the U.S. Gulf of Mexico during the 1990s.
Add all of that to recently-announced tax breaks for North Sea explorers, and this is one of the most interesting plays to emerge in energy for some time. Project developers, take note.
Here’s to a star being re-born,
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