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Lloyds List: Independents flock to secure UK oil blocks

Offshore Energy is edited by Martyn Wingrove +44 (0)20 7017 4629 [email protected], Lloyds List
Published: Feb 06, 2007

EXPLORATION specialists have secured a host of new blocks in the UK’s 24th licensing round, but the oil majors remained on the sidelines.

Drilling activity levels will remain high after the latest British offshore licensing programme, as 150 licences covering 246 blocks were awarded to 104 companies.

The Department of Trade and Industry offered 79 traditional and 65 promote licences, where the rents are charged at 10% of normal rates, plus six frontier licences in the West of Shetland area, where some of the oil majors showed their interest.

But the DTI withheld three blocks in Cardigan Bay and one in the Moray Firth because of environmental and marine mammal habitat concerns.

The promote licences seem to be a success in increasing drilling and other exploration operations as 23 of the 58 offered in the 22nd round three years ago have been extended to allow 13 wells and 10 new seismic surveys to be completed. Of the major oil companies that also have downstream operations, only Chevron, ConocoPhillips, Total and Eni were involved in the round, with BP, Shell and ExxonMobil absent.

Danish group Maersk Oil was one of the more aggressive companies in the round, securing seven as operator and one as an equity holder.

Michael Engell-Jensen, managing director of Maersk Oil’s British operations, said: ‘We have been awarded 15 blocks in eight licences. We look forward to exploring further for oil and gas in the UK sector as part of our growth strategy.’

All of its operated blocks are in the central sector, where it has just started the Dumbarton project and has the Affleck development, plus the Janice floating production platform.

London-listed explorer Granby Oil was another big winner in the round, taking 15 blocks in seven licences with investment partner Gas Plus Italiana.

This almost doubles Granby’s North Sea acreage position and increases its net unrisked prospective resources by 78% to 560m barrels oil equivalent. One of its licences is in the northern area, two are in the southern gas basin and the rest in the central sector.

‘We have both refreshed and upgraded our exploration portfolio and strengthened our prospective resources and acreage position in the southern and central areas,’ said Granby’s managing director David Grassick.

‘The addition to our southern gas basin position provides a substantial area of growth.

‘On some of the new prospects we will seek to fast track for early drilling.’

Calgary-based Ithaca Energy also gained seven operated licences including two blocks that are adjacent to its 2006 Athena discovery.

‘We have captured projects around our core areas that allow us to extend our appraisal and exploration drilling programmes, all of which lie close to established infrastructure,’ said Ithaca’s vice-president for exploration Nick Muir.

One of these opportunities may see Ithaca drill the Athena East, formerly known as Bordeaux, discovery this year as a prelude to its tie-back to the Claymore platform.

Large Canadian oil companies secured several blocks in round 24.

Nexen, which has just started the large Buzzard oil field, gained five licences including one that opens a new exploration area in Liverpool Bay.

Calgary-based Talisman is taking a punt West of Shetland with eight blocks and gained a further two North Sea licences.

US groups were limited in their approach. Chevron has focused on West of Shetland while ConocoPhillips took one licence. Houston-based Apache and Newfield took three licences each in the North Sea.

US explorer Endeavour International was a big winner taking eight licences including 10 blocks after it also gained acreage in the Norwegian round.

London-listed Faroe Petroleum is involved in five new licences, two in the west and three in the North Sea, after the 24th round.

Faroe has gained control of the Marjun discovery and is Chevron’s partner in the Glenshee licences West of Shetland.

It is working with Oilexco in the Halibut area and taken a licence over the Keira discovery in the central sector.

‘These new licences further broaden and improve the balance of our portfolio. We have consolidated our position by adding licences that cover 2,300 sq km and have near- term drilling opportunities,’ said Faroe’s chief executive Graham Stewart.

Another London-listed firm was involved in licences. Encore Oil, led by Alan Booth, who helped find the Buzzard field, gained equity in 12 blocks in the central and southern sectors.

It has a couple of contingent wells to drill to appraise a discovery in block 14’30a and sizeable prospects in 113’30 and 28’9 areas.

‘These blocks will further strengthen our portfolio and provide additional new term drilling activity,’ said Mr Booth.

Anglo-Irish firm Tullow secured six blocks in the southern basin around its two core operating areas and intends to shoot new seismic surveys to find 2008 drilling targets. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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