North Sea Transition Authority grants 24 new oil and gas licenses to major energy firms

In a significant step towards ensuring the UK’s energy security and supporting the domestic economy, the North Sea Transition Authority (NSTA) has offered 24 new licenses to 17 companies as part of the second tranche of the 33rd oil and gas licensing round. This move, announced on January 31, 2024, sees industry giants such as Shell, Equinor, bp, TotalEnergies, and NEO among the recipients, highlighting the ongoing commitment of the UK to leverage its own resources amidst the global push for energy sustainability and security.

The allocation of these licenses, following the 27 awarded in the first tranche last October, underscores the robust interest and investment in exploring the UK Continental Shelf. The licenses cover 74 blocks and part-blocks across the Central North Sea, Northern North Sea, and West of Shetland, with more to be offered upon the completion of environmental evaluations. This strategic distribution reflects the NSTA’s intent to bolster energy production while adhering to stringent environmental standards.

The 33rd Licensing Round, opened in October 2022, attracted 115 bids from 76 companies, demonstrating a strong industry appetite for the UK’s offshore resources. This round is pivotal in the NSTA’s efforts to support an industry that supplies about three-quarters of the UK’s domestic energy needs. With official forecasts suggesting that oil and gas will continue to play a crucial role in the nation’s energy mix, even as demand decreases, the timely development of these licenses is crucial.

Boosting Domestic Energy Supply: UK Awards New Licenses to Drive Economic Benefits and Job Security

NSTA’s internal analysis suggests that the average time from licensing to production has been reduced to nearly five years, indicating that these new licenses could start contributing to the UK’s energy production before the end of the decade. This is crucial for providing skilled jobs, supporting the economy, and reducing greenhouse gas emissions. The UK’s oil and gas sector has already seen a significant reduction in production emissions and is on track to meet its reduction targets as part of the North Sea Transition Deal agreed in 2021.

Moreover, the NSTA’s recent Development and Production Consent for the Victory gas field and the awarding of 21 licenses for carbon storage in 2023 highlight the multifaceted approach the UK is taking towards energy production and environmental sustainability. These efforts, alongside the promotion of hydrogen as a key element of the UK’s drive to reach net zero emissions by 2050, reinforce the country’s commitment to a balanced and responsible energy transition.

The NSTA and Minister for Energy Security and Net Zero, Graham Stuart, emphasize the importance of maximizing domestic resources to ensure energy security, economic growth, and environmental sustainability. With these new licenses, the UK aims to strengthen its energy independence while advancing its net-zero goals, showcasing a pragmatic approach to balancing energy needs with climate commitments.

The UK’s decision to award new oil and gas licenses is a pragmatic approach to securing energy independence, supporting economic growth, and advancing environmental goals. By leveraging domestic resources, the UK can reduce reliance on imported energies, which are often less environmentally friendly. These licenses not only promise to bolster the UK’s energy supply but also contribute significantly to job creation and economic stability. As the UK continues to navigate the complex path towards net-zero emissions by 2050, initiatives like these play a crucial role in ensuring a smooth and sustainable energy transition.