Interest in latest UK oil exploration tender lowest in 14 years

This year, only 29 applications were received for 113 UK oil exploration blocks while 1,261 blocks were on offer. Wikimedia photo.

In 2017, the hunt for UK oil is expected to fall to the lowest since the early 70s

LONDON, Oct 31 (Reuters) – Britain’s latest tender for offshore exploration permits attracted the lowest interest in 14 years, underlining how the mature North Sea is struggling to entice explorers to extract the 20 billion barrels of oil equivalent left untapped.

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The 29th round for UK oil offshore licences, which included unexplored areas around the Shetlands, received only 29 applications for 113 blocks, compared with 1,261 blocks on offer, Britain’s Oil and Gas Authority (OGA) said on Monday.

“Long standing investors continue to seek new acreage and we also welcome the arrival of new entrants,” OGA Chief Executive Andy Samuel said in a statement.

A total of 24 companies submitted applications, including multinationals and first-time applicants, the OGA said.

The total of applications received was the lowest since 2002, however, when just 289 blocks were on offer.

Oil companies across the globe have severely cut back spending on exploration as weak prices have squeezed cashflow.

Aware of tighter budgets, the OGA reduced licence-related rental fees by up to 90 per cent in the latest round, which closed on Oct. 26, and offered more flexibility in terms of when explorers can carry out certain work programmes.

The hunt for new oil and gas fields in the British part of the North Sea is expected to fall this year to the lowest since the early 1970s when North Sea oil and gas extraction first took off.

(Reporting by Karolin Schaps; Editing by Mark Potter)