LONDON, Feb 12 (Reuters) - The number of new exploration wells to be drilled in the British part of the North Sea this year is set to fall to the lowest since the hunt for oil and natural gas began there in the early 1970s, research by consultancy 1Derrick showed.
Only 15 exploration wells are currently expected to be drilled offshore Britain this year, including BP’s South Farragon well and Premier Oil’s Laverda/Slough and Bagpuss prospects, the lowest since 1971.
The number of exploration and appraisal wells fell to 20 in 2015 and many oil and gas companies active in the North Sea have extended or cancelled their licences, 1Derrick data showed.
Energy companies have slashed spending on exploration and other costs as they weather a market downturn that has seen crude prices fall by 70 percent since mid-2014.
The British part of the North Sea has been hit especially hard as tighter wallets meet some of the highest exploration and operating costs in the world due to the basin’s maturity.
The government is set to make its oil and gas licensing regime more attractive this year by giving companies more freedom on timing, the head of Britain’s oil regulator told Reuters on Thursday.
“It will minimise the administrative burden on industry and ensure decisions are made in a fair and transparent way,” a spokesman for the Oil and Gas Authority (OGA) said.
The OGA, tasked with making sure North Sea oil and gas operators maximise extraction, will launch the 29th offshore licensing round this year, he said.
Britain is estimated to have billions of barrels left for extraction in the North Sea, worth around 200 billion pounds to UK government coffers. (Reporting by Karolin Schaps; Editing by Jan Harvey)