The NSTA confirmed 31 licence offers in the latest phase of the UK’s 33rd oil and gas licensing round, which aims to add an estimated 545mn boe by 2050. A total of 82 offers to 50 companies have now been made in the round, which attracted 115 bids from 76 companies across 257 blocks and part-blocks.

Following discussions with The Crown Estate and Crown Estate Scotland, the NSTA has introduced for the first time a new clause for overlapping oil and gas licences and wind leases that ‘will be the main commercial mechanism for these licences to resolve spatial overlaps and to support co-existence of these important industries’.

According to Offshore Energies UK (OEUK), the latest NSTA offers will ‘strengthen energy security and business confidence across all sectors as the expansion into wind, hydrogen and carbon capture and storage accelerates’.

David Whitehouse, OEUK CEO, comments: ‘We all recognise that our energy mix must change, and our sector is ramping up renewables and accelerating the drive to net zero. But this journey will take time. Meanwhile our North Sea basin is naturally declining. We have over 280 oil and gas fields but by the end of the decade 180 of them will have stopped producing. We need the churn of licences for an orderly transition that supports jobs and communities across the country and meets our energy needs.’

However, RenewableUK’s Chief Executive Dan McGrail says ‘much greater prioritisation of renewables over oil and gas in spatial planning’ is needed. ‘Offshore wind is going to be the backbone of our future system, not fossil fuels. Prioritising offshore wind over oil and gas isn’t just the right choice for the planet, but given renewables are the lowest-cost means of generating power, we should be doing this for billpayers.’

Meanwhile, Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), comments: ‘Flying in the face of advice from experts like the International Energy Agency and United Nations, who have said that reducing demand is the way to energy independence, new North Sea licences won’t help to lower bills because the oil and gas will be sold to the highest bidder by the companies that get it out of the ground. We can’t control prices set by volatile international markets, so to shield ourselves from another gas crisis in future it’s clear we’ll have to reduce our demand for it. Yet the government fumbled the last renewables auction round, which could have saved us 22 times the amount of gas that could be produced from new North Sea licences by displacing gas power stations.’

‘The “energy patriotic” thing to do is to insulate private rented homes, deploy electric heat pumps and electric vehicles that run on British renewables; but instead the government has U-turned on these policies. As things stand the UK is going backwards on its energy security,’ concludes Ralston.

Up to £3bn of emissions reduction schemes proposed by North Sea operators
In related news, North Sea oil and gas operators could invest up to £3bn in 14 major projects capable of cutting up to 32mn tonnes of lifetime CO₂ emissions from their production activities, a quantity greater than London’s estimated annual emissions in 2021, according to the NSTA’s latest annual performance review of the UK’s top 20 operators. This could be achieved by using low-carbon power on platforms, installing technologies designed to eliminate routine flaring and venting, and using hydrogen.

However, final investment decisions have been secured for fewer than half of these projects to date, highlighting that there is still work to do, comments the industry regulator. It says it ‘expects operators to press ahead with all of them and come up with more emissions reduction schemes in the coming years’.