The North Sea Transition Authority’s announcement that it has received 115 bids for new oil and gas exploration licences shows how UK offshore energy operators are doing their best to support the nation’s energy future, Offshore Energies UK (OEUK) said today.

The 33rd offshore oil and gas licensing round closed on 12 January 2023. The 115 bids were spread across 258 blocks and part-blocks and were submitted by 76 companies, according to NSTA data. 

This compares with the NSTA’s 32nd licensing round in 2019 which received 104 applications covering 245 blocks and part-blocks. In 2019 a total of 768 blocks and part-blocks were offered, compared with 932 this year. 

The latest round included four priority areas with known oil and gas reserves, but many others are less certain. 

OEUK said it was important to note that although the headline number of applications was positive, many details remained unclear – in particular, what the licence applications were actually for. This is because licences can be issued for exploration, production, or other purposes.

The NSTA will spend the next three months analysing the applications and announce the awarding of licences from April when more details will become clear.

Oil and gas is essential to the UK’s energy security. OEUK’s Economic Report 2022 described how the UK gets about 75% of its total energy from these fuels and is already partially reliant on imports. In 2021, for example, the UK had to import just over 60% of its gas. About 23 million UK homes (85% of the total) rely on gas boilers for heat.

The UK also relies on gas for its power supplies with gas-fired power stations producing 42% of the nation’s electricity. Similarly, oil powers most of the UK’s transport with 32 million vehicles running on petrol and diesel.

Across the UK the offshore industry also supports 200,000 jobs.

Mark Wilson, director of HSE and operations at OEUK said:
“These license applications could potentially help the nation safeguard its supplies of oil and gas and support the UK during its transition to low-carbon energy. These applications reflect long-term thinking by companies which will invest many millions of pounds in the North Sea to search for new reserves, with no guarantee of success.

“The aim of issuing these new licences is simply to support the UK while it builds the infrastructure needed for a low-carbon future.  As some of our older reserves are becoming depleted new finds will help us replace lost production of oil and gas and positively contribute to UK’s energy transition and energy security.  This is why new licences are so important.

“All new developments will have lower emissions than older fields, helping the industry meet it’s target of halving emissions by 2030 and net zero emissions by 2050. Our industry has already reduced the emissions from UK oil and gas production by 20% since 2018. New developments will be subject to checks by the industry regulators to ensure that the production is consistent with our binding commitments on climate change.”

Key facts

The UK gets three-quarters of its total energy from oil and gas.

• 23 million (85%) of UK homes rely on gas boilers for heating
• 1.5 million more homes rely on heating oil
• 42% of the nation’s electricity comes from gas-fired power stations
• 32 million vehicles run on petrol or diesel
• Gas is the UK’s largest energy source, supplying 43% of total UK energy in 2021.
• The UK consumed 76 billion cubic metres (bcm) of gas in 2021 – equivalent to 1,100 cubic metres per person.
• About 32bcm came from Norway and 29bcm were from the UK continental shelf
• Most of the rest was imported as liquefied natural gas from a mix of countries.
• Oil is the second largest UK energy source at 32% of total energy

The UK’s production of oil and gas fell sharply in 2021.
- Oil Production was 45m tonnes
- Gas production was 29bn cubic metres of gas
- These figures represented a 17% decline on 2020 and a 20% decline on 2019 

Imports surged in 2021 when the UK’s net imports were the equivalent of:
- 62% of its gas
- 18% of its oil

• Imports will keep rising. By 2030, without additional investment, the UK will have to import around 80% of its gas and 70% of its oil.

KeyFacts Energy Industry Directory: Offshore Energies UK