The 25th Seaward Round offered a record-breaking 2,297 blocks, which was increased from 1,411 blocks offered in the 24th round. (Image courtesy of IHS Inc.)

The 25th Seaward Licensing Round for the UK continental shelf (UKCS) received a record 193 applications covering 277 blocks, according to the Department of Business, Enterprise, and Regulatory Reform (BERR). This was the highest number since 1974, and offers will be made to successful applicants later this year.

This round, 2,297 blocks or part blocks were available for application. According to Paul Webber, regional manager North West Europe, IHS Inc., this number exceeded the 24th round by 1,411 blocks. Applications included traditional and frontier seaward licenses. In addition, 72 of the blocks given up under the Fallow process were included in this round.

The record-breaking 25th round included areas of the UKCS that have not been explored. According to John Hutton, Secretary of State for Energy, the UK government is committed to maximizing its own resources.

Webber said the Traditional Seaward Production licenses have an initial term of four years for exploration with an additional four-year period to compile and submit a field development plan. The production period for each is 18 years with a possible extension. Fifty percent of the license is to be surrendered after the first term. All acreage not covered by a field development plan must be surrendered.

The terms for Frontier licenses is geared to increase activity in the West of Shetland region. The rental fee will be cut by 90% for the first three years, and each license will include a longer exploration and development period than the traditional licenses.

Companies will have access to large amounts of acreage with 75% of the land being surrendered after three years. The exploration period was increased to three years due to the difficulty of acquiring data for the region. The licenses now have a 3 + 3 exploration phase instead of the former 2 + 4, according to Webber.
There are several big players holding acreage in the United Kingdom.

Among the largest acreage holders are ExxonMobil Corp., Venture Production plc, Royal Dutch Shell plc, Talisman Energy Inc., BP plc, Chevron Corp., Sterling Resources Ltd., ConocoPhillips Co., and Nexen Inc.

From January 2007 to present Oilexco, Talisman Energy Inc., Maersk, and Antrim Energy Inc. have drilled the most wells on the UKCS.

The good news for many operators may come in the way of farm-in opportunities. According to Hannon Westwood’s UKCS Potential Farm-in Opportunity Report, about 180+ exploration and appraisal wells are planned within the next two years. As many as 70 wells have been identified as farm-in opportunities.

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