What’s new in exploration

 Vol. 233 No. 12

The year 2012 was exceptional for international leasing rounds, with several countries achieving record-breaking results, in terms of amount of acreage auctioned and number of winning bids. The deadlines for some of the licensing rounds have been extended into 2013.

Gulf of Mexico. In November, the Obama administration announced the results of the Western Gulf of Mexico lease sale, covering over 20 million acres. The auction yielded $133.8 million in high bids for 652,520 acres. ConocoPhillips was the highest bidder, with $51.8 million for 62 tracts in the Gulf. The sale was the first under the administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2012–2017.

South America. Ecuador launched its 11th oil licensing round in late November, for 13 blocks in the southeastern Amazon, in Pastaza and Morona Santiago provinces, near the border with Peru. The contracts provide for a four-year exploration period and a 20-year development period, if a commercial oil discovery is made.

This year, Brazil also announced approval for its 11th licensing round, the first oil and gas auction in five years. The round was approved by the National Council of Energy Policy (Conselho Nacional de Politica Energética or CNPE) in April; however, President Dilma Rousseff delayed final approval until September, when the government agreed on allocation of royalties. Brazil’s energy minister said the government will schedule the first bidding round for exploration of pre-salt offshore oil blocks for November 2013.

Colombia’s Agencia Nacional De Hidrocarburos (ANH) said that the country’s 2012 licensing round did better than expected, with 105 offers for 49 blocks, each of which received at least one offer. Ecopetrol won the most blocks, 11, of which five are 100%-owned by the state firm. Anadarko, ExxonMobil and China’s CNOOC each won three blocks. India’s ONGC won two. Operators invested $2.6 billion in the round.

Europe. In Norway, the Norwegian Petroleum Directorate (NPD) received applications from 36 companies in the country’s 22nd licensing round, with the greatest interest being shown in the Barents Sea. The NPD received applications from 36 companies for 86 blocks and parts of blocks, of which 14 were in the Norwegian Sea and 72 in the Barents Sea.

After announcing a tax break to encourage investment in older fields, the UK’s latest round has concluded with the offer of 167 new licenses covering 330 North Sea blocks—a record level, according to officials. The 224 applications were the most ever received. Blocks were awarded to 13 operators.

Greece will hold an exploration licensing round in the Ionian Sea and south of Crete in first-half 2014, the energy ministry said. The Nordic Explorer research vessel of Norway’s Petroleum Geo-Services ASA (PGS) is shooting a seismic survey of 220,000 sq km, in the Ionian Sea, and the maritime zone south of Crete. Processing and interpretation of survey data should be completed by mid-2013.

Africa. In December, Gabon announced plans to launch a new deep offshore oil licensing round in June, providing new investor-friendly regulations can be enacted by then, the oil and energy minister said. Gabon has the seventh largest oil reserves in Africa, BP data show, and the country expects to build on this.

Tanzania’s government has delayed a licensing round for up to nine deep-sea oil and gas blocks, to allow parliament to ratify a new natural gas policy next month. State-run Tanzania Petroleum Development Corp. said that the delay will allow the policy to be ratified before the start of the next licensing round. The round will include nine blocks sitting in 1,200 m to 3,500 m of water depth. The blocks on offer include new areas and tracts that have been relinquished by current operators.

South Asia. Pakistan’s government has extended the bid submission deadline for its upstream licensing round by 90 days to March 10, 2013, an official at the Ministry of Petroleum and Natural Resources said.

Middle East. Iraq’s fourth licensing round took place in May 2012, with 12 areas on offer, covering 80,700 sq km. The bidding round included both unexplored areas and newly discovered fields that had not yet been exploited. Seven of the 12 blocks included in the round were gas-prone, while the rest are oil prospects, totaling potential reserves of 29 Bcm of gas and 10 billion bbl of crude oil.

Royal Dutch Shell, RWE and TransGlobe Energy won concessions in Egypt’s first licensing round since the 2011 revolution. The biggest winners were TransGlobe, with four concessions, and Shell with three. Eleven of the 15 blocks received offers.

Asia-Pacific. Seychelles has pushed back the bidding process to license 30 oil and gas exploration blocks and is now likely to invite bids next year, a senior energy official said. East Africa has become an exploration hotbed after several oil discoveries in the area, including oil in Uganda and natural gas finds in Tanzania and Mozambique. Seychelles National Oil Company said in April that it was launching bids for 30 blocks, but this was delayed. So far, Afren and Australia’s WHL Energy are the only companies holding exploration licenses in Seychelles.

China opened its second shale gas licensing round in September, offering 20 blocks. The new offer was issued by the Ministry of Land and Resources. Both pure domestic enterprises and Chinese-controlled foreign JVs have been invited to participate. The 20 blocks cover 20,002 sq km, spanning seven provinces.

Thailand has put 65 blocks up for auction in its 20th licensing round. The round, which will last for one year, covers 235,576 sq km. Fifty-six blocks are on offer onshore, with the remainder in the Gulf of Thailand. The deadline for first applications is July 16, 2013.