OGA launches 30th Offshore Licensing Round focusing on mature areas

The UK’s Oil and Gas Authority (“OGA”) launched the 30th Offshore Licensing Round for the UKCS on 25 July 2017. The Round has a particular focus on mature areas, with 813 blocks or part blocks on offer.

Model Clauses and the Innovate Licence

Notably, OGA has published new draft model clauses to be applied to licences issued in this 30th Round. Amongst other changes, the amendments:

• provide for the Initial Term of a licence to be divided into phases and for termination at the end of a phase when the criteria set out in the new model clause 4(1) to (3) have not been met;
• provide for termination on the expiry of any other deadline in the Work Programme for the Initial Term when the action required to be taken by that deadline has not been taken;
• provide for amendments to the Work Programme for the Initial Term to be agreed by way of notice from the Licensee and subsequent direction from the OGA, rather than by Deed of Variation; and
• provide for extension of the phases of the licence.

These changes are principally aimed at giving full effect to the Innovate Licence. Launched - at least in part - in the 29th Offshore Licensing Round (see our previous Law Now), this new concept is intended to allow for greater collaboration between licensees and OGA. Developed by the MER UK Exploration Board (an industry task group focused on increasing flexibility in the UKCS licensing regime) this new licence permits parties to pitch a ‘tailor-made’ optimal work programme to OGA. Whilst elements of the ‘Innovate’ notion were introduced in the last Round, OGA considered that the full benefit of the concept could only be realised through amendments to the model clauses contained in the Petroleum Licensing (Production) (Seaward Areas) Regulations 2008. A consultation on those proposed amendments closed on 6 January and an OGA response was issued on 21 April. The proposals have now been implemented in the new draft clauses (available here).

Blocks on Offer

A total area of 114,426km² is on offer in the 30th Round; the full list of acreage can be viewed here. The blocks cover mature areas in the Southern, Central and Northern North Sea, the West of Shetland and East Irish Sea. Mature areas of the UKCS were last on offer in the 28th Offshore Licensing Round in 2014, which was one of the largest rounds in five decades.

To assist would-be licensees with their technical assessments, OGA released a tranche of data in the run-up to the Round. Around 140 data packs were released, some of which include ‘technical montages’, on undeveloped discoveries offered in the Round, along with regional geological maps covering the Central North Sea and Moray firth.

Comment

The 30th Round will remain open for 120 days, closing on 21 November 2017. Decisions on block awards are expected to be made in Q2 2018.

The 31st Offshore Licensing Round is expected to focus on frontier areas of the UKCS including those areas covered by the 2016 UK Government-funded seismic acquisition project of South West Britain and the East Shetland Platform.