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Birmingham Post
Birmingham Post
Business
David Laister

North Sea oil and gas licensing round opens with 'significant boost to UK energy security' sought

A significant boost to UK energy security has been underlined ahead of today’s launch of the latest oil and gas licensing round.

The North Sea Transition Authority is inviting applications for licences to explore and potentially develop 898 blocks and part-blocks in the North Sea which may lead to more than 100 licences being awarded.

To encourage production as quickly as possible, the NSTA has identified four priority cluster areas in the Southern North Sea, which have known hydrocarbons, are close to infrastructure and have the potential to be developed quickly. It will seek to license these ahead of others in what is the 33rd such round - launching at 6pm.

Read more: New Climate Minister reaffirms Net Zero commitment in first international speech

Applicants will be encouraged to bid for these areas so they can go into production as soon as possible.

Business and Energy Secretary Jacob Rees-Mogg said: “Putin’s illegal invasion of Ukraine means it is now more important than ever that we make the most of sovereign energy resources, strengthening our energy security now and into the future.

“Ensuring our energy independence means exploiting the full potential of our North Sea assets to boost domestic production – recognising that producing gas in the UK has a lower carbon footprint than importing from abroad.

“That is why we welcome the launch of the NSTA’s new licensing round, which will help support highly skilled jobs across the UK’s energy industry, boosting both our energy security and our economy.”

Eyes on the future: An engineer looks over Centrica Storage's Rough facility off the East Yorkshire coast. (Simon Price/Firstpix)

The average time between discovery and first production is close to five years and falling, according to NSTA analysis.

It is the latest strand in ongoing work with industry to ensure security of supply. Earlier this year leading operators were asked to provide details of their production and investment plans, and to look at how they might go “further and faster” wherever possible.

Other measures include licensing the Rough gas storage facility, off East Yorkshire, and encouraging operators to look again at reopening closed wells.

Dr Andy Samuel, NSTA chief executive, said: “The NSTA is working closely with industry and government to meet UK needs with North Sea supplies produced as cleanly as possible. The UK is forecast to continue importing natural gas as we transition to a fully renewables system and our North Sea gas has less than half the footprint of imported LNG. This licensing round includes gas discoveries in the Southern North Sea which can be rapidly tied back to existing infrastructure.

“Security of supply and net zero should not be in conflict. The industry has committed to halving upstream emissions by 2030 and investing heavily in electrification, carbon storage and hydrogen. Signs are promising so far – our first carbon storage round closed last month with 26 applications from 19 companies across all the areas we offered.”

Oil and gas currently contribute around three quarters of domestic energy needs and forecasts show that, even as demand is reduced, they will continue to play an important role.

Acreage will be offered in the West of Shetland, Northern North Sea, Central North Sea, Southern North Sea and East Irish Sea. To support bids, the NSTA is publishing data packs with summaries of key prospects and discoveries to stimulate exploration and encourage new opportunities.

Applications will be welcomed until 2pm on January 12. First licences are expected to be awarded from the second quarter of 2023.

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