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The number of new bidders trying to wade into the British offshore energy sector is a vote for as much as 6 billion barrels of new oil, a trade group said.
The British government said it received 96 applications from 68 different companies, some of which were bidding for the first time ever, for rights to tap into the potential in a license round covering 44,100 square miles in the British North Sea and surrounding waters.
Mike Tholen, the director of exploration and production for trade group Oil & Gas U.K., said the new entrants represented a vote of confidence for offshore as early signs point to the potential for as much as 6 billion barrels of new oil.
"While this reflects industry's growing optimism, our interests now turn to how many awards will be given, and the commitments which follow," he said in a statement.
The British Oil and Gas Authority, the government agency in charge of the licensing round, said the new opportunities would come from a "large inventory of prospects and undeveloped discoveries." Nick Richardson, the head of exploration at the agency, said much of the focus was on areas with infrastructure already in place.
"Despite the difficult economic environment, industry has responded strongly to this round, confirming the high remaining potential of the British continental shelf," he said.
A North Sea review from consultant group Wood Mackenzie, published early this year, found more than a dozen new oil and natural gas fields are expected to enter into production this year. While new developments looking forward are scarce, about 30 percent of the production by 2020 will come from fields like Catcher that aren't yet fully operational.
The success offshore comes amid disappointing results for the British economy. Delivering his budget for 2017, Phillip Hammond, the British treasury secretary, said the government revised its forecasts lower than initially expected and lower than many of its peer economies.
"The Office for Budget Responsibility now expects to see gross domestic product grow 1.5 percent in 2017, 1.4 percent in 2018, 1.3 percent in both 2019 and 2020, before picking back up to 1.5 percent, and finally 1.6 percent in 2022," he said in his remarks Wednesday.
The OBR said in its separate statement that growth was impacted in part by the uncertainty associated with the British exit from the European Union. Since March, there's also been a significant downward revision to potential productivity growth, the office added.
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