Britain has awarded 25 licenses for oil and gas exploration in previously untapped waters and announced a new licensing round for mature areas to be held in late May or June, the Oil and Gas Authority (OGA) said on March 23.

Seventeen companies received exploration licenses in a tender that closed in October. The tender attracted the lowest interest in 14 years as appetite for finding new oil in the North Sea has waned because of high costs and weak oil prices.

In a bid to boost interest the OGA had cut rental fees by up to 90%.

Oil majors Royal Dutch Shell (NYSE: RDS.A) and Statoil (NYSE: STO), mainly in partnership with BP (NYSE: BP), received most licenses. In a sign of the North Sea’s changing ownership structure, many newcomers, including Chrysaor and Simwell Resources, were also successful, documents showed.

The upcoming licensing round for mature areas will be the “most significant” in decades, the OGA said, because companies will be able to bid for licenses relinquished since the previous tender for the area in 2014. It will be the 30th licensing round offering acreage in those areas and other mature parts of the basin.

Despite being an old basin, Britain's North Sea is estimated to have billions of barrels of oil left for extraction, worth around 200 billion pounds (US$250 billion) for British government coffers.

However, drilling activity in Britain’s North Sea has been at a record low for two years as companies focus on other assets. This year, Britain's oil lobby group expects 16 exploration wells to be drilled, up from 14 last year.

Analysts at Wood Mackenzie expect exploration costs to fall another 10% this year because of the oversupply of equipment, which could help make exploration work more economic.

Offshore